Even though the open source initiative Uniswap (UNI) claimed on January 3 that it had successfully completed $1.7 billion in swaps, UNI has had a difficult start to the year. Despite this, since the year’s beginning, the price of UNI has decreased by about 20% in a single week along with a decline in the quantity and number of active addresses.
On-chain analytics back up a pessimistic view of the price of UNI. The combination of growing supply on exchanges and a drop in active addresses and volumes could lead to more selling pressure on the DeFi coin. Unlike other cryptocurrencies in the ecosystem, the DeFi asset has not recovered despite expectations of Spot Bitcoin ETF approval.
Uniswap signal correction for on-chain metrics
On Tuesday, uniswap supply on cryptocurrency exchanges increased to 6.92% of the overall supply, nearly reaching a six-month high. More than $420 million worth of Uniswap tokens were resting on exchange platforms in January, marking an increase in UNI token inflows to exchanges.
Given this steady influx, there will probably be increasing selling pressure on the DeFi asset. The asset’s price usually declines when selling pressure increases. This could account for the 20% decline in UNI’s price over the previous week.
Volume and active addresses are two additional on-chain metrics that support the price drop theory. Based on Santiment statistics, both Uniswaps have been going lower since the beginning of January.
These measurements show how relevant an asset is and how much demand there is in the market. In conjunction with the increasing availability of exchange, this reinforces a pessimistic outlook for UNI.
On January 3, $1.7 billion worth of swaps were completed, yet the price of Uniswap did not rise. UNI holders lost 10.68% each month and almost 20% per week. As of this writing, the price of UNI is $6.117 on Binance, representing a 2% decrease in value for the day.