Uniswap Price Prediction as 20M UNI Tokens Flee Exchanges After Burn News

Uniswap price has pulled back in the past few days. It is entering a local bear market as the recent news on token burn faded.

UNI price dropped to a low of $7.26, down by nearly 30% from its highest level this week. So, will the ongoing whale buying and exchange outflows boost its price?

Millions of UNI Tokens Have Left Exchanges This Week

On-chain data compiled by Nansen shows that investors have moved millions of tokens from exchanges in the past few days. There are now 651 million UNI tokens in exchanges, down from 671 million on November 10.

This means that 20 million tokens, currently valued at over $145 million, have moved out of exchanges, which is normally a good thing for a cryptocurrency, as it shows that investors are not selling their coins.

Exchange outflows also mean that existing investors with tokens in exchanges are moving them to self-custody. This is also considered a positive aspect because these investors typically have a long-term perspective on the token.

Additional on-chain data indicates that whale investors have been gradually accumulating the token. They now hold 9.43 million tokens, much higher than the October low of 8.3 million. This means they have purchased over 1 million tokens, currently valued at over $7 million.

More data shows that smart money investors have continued buying their tokens in the past few months. They now hold 41.2 million tokens, up from this month’s low of 41.13 million.

Whale and smart money investors’ activities is an important thing in fundamental analysis because of their role in the crypto industry. Whales are those investors who hold substantial tokens, while smart money are that who have a record of executing profitable trades.

Uniswap Made a Major Token Burn Announcement to Boost UNI Price

The ongoing whale accumulation happened before Hayden Adams, Uniswap‘s founder, made a major announcement regarding its future.

In an X post, he shared that Uniswap would burn 100 million tokens currently valued at over $700 million. These tokens will come from its treasury and will represent all the fees the protocol fees that could have been burned if the process started at its token launch.

The other major news was the unification of its network, with all the collected fees going towards UNI token burns. This includes the main Uniswap product and Unichain, the layer-2 network it launched earlier this year.

The proposal also has other key areas, including the introduction of Protocol Fee Discount Auctions to improve liquidity pool outcomes, and introducing aggregator hooks that will turn Uniswap V4 into an onchain aggregator.

All these actions are aimed at boosting the UNI price value in the long term by reducing its supply and inflation.

The announcement came as Uniswap continues to face substantial competition in the decentralized exchanges (DEX) industry. Data compiled by DeFi Llama shows that Uniswap handled over $95 billion worth of tokens in the last 30 days. PancakeSwap’s volume stood at $82 billion, while HumidiFi handled $35 billion.

Uniswap competition is also coming from perpetual futures platforms like Hyperliquid, Aster, Lighter, edgeX, and Apex Protocol.

Uniswap Price Technical Analysis

The daily timeframe chart shows that the UNI price peaked at $12.21 in August and then retreated gradually. It eventually reached a low of $4.88 earlier this month. This was an important level as it coincided with the lowest level in April and May this year.

Uniswap price has been forming an inverse cup-and-handle pattern, a common bearish reversal sign. The recent surge was part of the handle section.

Therefore, the most likely UNI price forecast is bearish, with the initial target being at $4.90, the lower side of the cup. A move below that level will point to more downside, potentially to below the psychological point at $4.

The bearish UNI price forecast will become invalid if the coin rises above this week’s high of $10.