Uniswap Drops 10%: Is a Rebound or Breakdown Below $13 Coming Next?

Uniswap (UNI) traded at $13.32 at press time, reflecting a 10.59% decline in the last 24 hours and a modest 0.50% gain over the past week. 

Meanwhile, its 24-hour trading volume stands at $444,827,855, signaling active market participation. The circulating supply of 600 million UNI brings its market capitalization to $7.97 billion, maintaining its position as a key player in the decentralized finance sector.

The current price decline marks a retracement from UNI’s recent highs of $17. Technical indicators point to bearish sentiment, with support levels being closely monitored by traders for potential recovery.

Technical Indicators Signal Weakening Momentum

The 4-hour chart shows a buy signal from the TD Sequential indicator, suggesting a potential rebound if the $13.20 support level holds. 

The TD Sequential presents a buy signal on the #Uniswap $UNI 4-hour chart for a potential rebound, but it will all depend on whether the $13.20 support can hold. pic.twitter.com/27DWW5JMv3

— Ali (@ali_charts) January 8, 2025

However, bearish signals from the Parabolic SAR indicate that downward pressure remains, with dots aligning above the price. Immediate support lies near $12.50, and failure to sustain this level could lead to a retest of $11.

The Average Directional Index (ADX) at 17.96 reflects a lack of strong trend momentum, indicating a market in consolidation. The Directional Movement Index (DMI) shows convergence between the +DI and -DI lines, signaling indecision among market participants. 

Bulls will need to push UNI above $15 to reestablish a bullish trajectory.

Derivatives Data Reveals Mixed Sentiment

Coinglass data reveals a mixed sentiment in the UNI derivatives market. Trading volume rose 6.77% to $582.95 million, while open interest decreased by 14.35% to $266.69 million. This suggests a reduction in leveraged positions, possibly due to heightened caution among traders amidst price volatility.

The Long/Short Ratio chart reflects a slight bullish bias, with 50.56% of traders taking long positions compared to 49.44% in shorts. While this shows a marginal preference for upward movement, the narrow difference points to overall indecision in the market. 

Recent fluctuations in the ratio may indicate cautious optimism for a potential rebound.

Liquidations Indicate Cautious Trading Behavior

The UNI liquidation data shows $471.98K in long positions liquidated compared to $935.47 in shorts. This imbalance suggests that recent price movements triggered stop-losses primarily among over-leveraged long positions.

Despite this, overall liquidation volumes remain relatively low, reflecting reduced volatility compared to past spikes in August and November. 

The subdued liquidations align with the current range-bound trading environment, as traders adopt a more cautious approach to avoid overexposure in either direction.

As UNI consolidates near $13.32, market participants continue to monitor key support and resistance levels, awaiting decisive signals for the next price movement.

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