Why is Uniswap (UNI) crashing?

• Uniswap’s price is down on Wednesday, having dropped nearly 9% over the past two days.
• Recent data indicates a positive spike in UNI’s Exchange Flow balance, highlighting selling pressure from investors.
• Recent data revealed that a whale transferred 2.25 million UNI tokens valued at $13.71 million into Kraken, likely to mitigate losses.

Uniswap (UNI) is trading in the negative territory on Wednesday at $5.84, following a nearly 9% decline over the past two days. The bearish trend is reinforced by UNI’s Exchange Flow balance, which reflects a positive spike. Additionally, data indicates that a significant wallet deposited 2.25 million UNI tokens worth $13.71 million into the Kraken exchange, possibly as a strategy to limit losses.

Uniswap On-Chain Data Suggests a Bearish Trend

Uniswap’s price continues to drop, hovering around $5.84 on Wednesday, reaching lows not seen since August 7, 2024. An analysis of UNI’s on-chain metrics clearly illustrates its bearish sentiment.

The Exchange Flow balance for UNI recorded the net influx and outflux of tokens in exchange wallets. A positive flow indicates that more UNI tokens were deposited than withdrawn, implying selling pressure from holders. Conversely, a negative value suggests more tokens departed the exchange than arrived, indicating reduced selling pressure.

In UNI’s case, the Exchange Flow balance surged from -428,920 to 2.23 million tokens from Tuesday to Wednesday, indicating a rise in selling pressure from investors.

During this period, the supply of UNI on exchanges increased by 2.67% in a single day. This is a bearish signal that further illustrates the declining confidence of investors in Uniswap.

UNI Exchange Flow balance chart.

The Daily Active Addresses metric, which measures network activity over time, also reveals a pessimistic picture for Uniswap. An increase in this metric signifies heightened blockchain utilization, while a decline indicates waning demand.

For Uniswap, the Daily Active Addresses have been steadily dropping since mid-November, suggesting declining demand for UNI’s blockchain, which negatively impacts its price outlook.

UNI daily active addresses chart.

Data revealed that a whale holding 2.25 million UNI tokens, valued at $13.71 million, was transferred to the Kraken exchange on Wednesday.

This wallet had accumulated these tokens at an average price of $6.92 between September 7, 2023, and November 18, 2024. At its highest, the whale enjoyed an unrealized profit of $26.5 million but is now facing a loss of $1.86 million. This recent transaction is likely aimed at curbing losses, which could further amplify selling pressure on UNI and lead to a further decline in its price.