Uniswap (UNI) bulls strongly defended the $4 price support level last week, but the downward pressure is increasing. Will Uniswap bears take control in the coming days? Uniswap price made a strong start to September, rising to $4.50. However, some critical metrics on the chain indicate that bulls’ energy could soon be exhausted.
Uniswap price increased by 7.14% in the first week of September, but UNI may face the danger of hitting a major sell wall in the coming days. According to CryptoQuant’s data, Uniswap bears have been depositing money into exchange wallets since the altcoin market crash on August 17.
The shared graph shows that UNI Exchange Reserves were at 43.97 million tokens on August 17. Since then, it has rapidly increased and reached 47.4 million UNI on September 7, the highest level since Uniswap was launched in 2018. Exchange Reserves track the total balances that investors currently hold in well-known cryptocurrency exchange wallets. An increase in exchange reserves can indicate that holders are looking to sell or swap other assets in the short term.
Additionally, the graph shows that since August 17 when Exchange Reserves started to rise, UNI price has decreased by 29%. If the bulls do not start a rally, further increase in selling pressure on UNI could potentially lead to another price correction. While market performance remains stable thanks to price speculators, Uniswap has struggled to attract network demand in recent weeks. According to Santiment, the last date Uniswap attracted up to 1,200 active users was around July 31.
Since then, the daily network activity rate has been steadily decreasing. The 805 addresses on August 31 were the highest level recorded in the past two weeks, and it decreased to 502 on September 3. The active addresses metric tracks the number of unique wallet addresses that engage in transactions on a daily basis.
In general, the higher the number of users distributing transactions, the greater the demand for the underlying UNI token. With no significant increase in Uniswap network demand, the surge in exchange reserves to an all-time high level increases the risk of Uniswap bears taking control.