Uniswap's UNI Token Plummets 20% as Whale Offloads $13.71M

Uniswap, a prominent cryptocurrency exchange, experienced a significant drop of over 20% in its value over the course of a week. This decline was primarily attributed to a large investor, often referred to as a "whale," who offloaded a substantial number of UNI tokens, the native token of Uniswap. The whale transferred 2.25 million UNI tokens to another cryptocurrency exchange platform, which analysts believed was an attempt to cut losses.

The massive sell-off led to a 2.80% decrease in the value of UNI tokens within the last 24 hours, bringing the price down to $5.80 on Wednesday. The whale had initially accumulated 2.25 million UNI tokens at an average price of $6.92 between September 7, 2023, and November 18, 2024. At its peak, the whale had an unrealized profit of $26.5 million, but recent market conditions reduced this profit to $1.86 million, prompting the whale to move $13.71 million worth of UNI tokens to Kraken, another cryptocurrency exchange.

Ask Aime: What caused Uniswap's (UNI) substantial drop in value, and how might it affect the broader cryptocurrency market?

Analysts observed that the indicators showed a bearish outlook for Uniswap. The Exchange Flow balance increased from -428,920 to 2.23 million within two days, suggesting a surge in selling pressure. This metric tracks the net movement of tokens into and out of exchange wallets, indicating that many tokens are being moved into exchange wallets. Additionally, the Supply on Exchanges metric showed a 2.67% increase in the last 24 hours, reinforcing the notion that traders are offloading their UNI holdings due to declining confidence in Uniswap’s performance.

Previous data indicated that such trends typically result in a further decline in the token’s price. Other market observers analyzed UNI’s technical indicators, revealing a negative sentiment towards Uniswap’s native token. The Bollinger Bands showed tightening with the middle band at $7.470, while the upper and lower bands were at $9.332 and $5.608, respectively. The UNI’s price being on the lower band indicated a strong bearish momentum, which could explain the drop in unrealized profit for the token.