Uniswap's UNI token dropped 10.5% in a day, breaking below its $3.9 support level to a three-week low of $3.4. Long liquidations topped $3.25 million as futures traders rushed to close positions, while spot sellers piled on to deepen the slide.
UNI broke below its $3.9 support level after holding between $3.9 and $4 for the past week, plunging to a low of $3.4. The token was trading around $3.5, down 10.5% on the day, as trading volume surged 151.8% to $319 million, a sign of rising activity on the sell side.
Long liquidations spark panic
The sudden drop triggered a wave of long liquidations among leveraged traders. According to CoinGlass, more than $3.25 million worth of long positions were liquidated, and traders facing further liquidation risk increased their selling.
Futures markets reinforced the move. Over the past day, UNI futures saw $137 million in outflows against $106 million in inflows, pushing the futures netflow down 328% to -$31 million. As a result, the increased selling activity on futures further weakened the market.
Spot sellers show more determination
Spot traders followed the same pattern once the support level gave way, with most selling their holdings on fears of deeper losses. CryptoQuant data shows Uniswap's exchange inflows rose to 5.1 million while outflows climbed to 3.9 million, lifting the exchange netflow to a monthly high of 1.2 million.
Both buyers and sellers stepped in as the slide continued, but sellers showed greater determination and overpowered buyers. Historically, such conditions have often preceded weaker price action and further losses.
Momentum indicators point to more downside
Uniswap's positive directional index fell from 26 to 19, while the ADX rose from 34 to 40 and the negative directional index climbed from 14 to 13, reflecting strengthening downside momentum against weakening bullish momentum. The Relative Vigor Index has also held a downtrend for five consecutive days, confirming the bearish structure.
Taken together, these indicators point toward the likelihood of further losses. If selling pressure keeps rising from all directions, UNI is likely to lose the $3.4 support level, with $3.0 as the next key level.
Source: AMBCrypto
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