New Uniswap (UNI) Protocol Launch Sparks User Activity Surge: Is This Bullish for Price?

The Uniswap (UNI) price has gained 14% over the past week as the markets react favorably to the recent UniswapX protocol launch. Will the long-term investors continue to hold out for more gains?

In a July 17 blog post, Uniswap CEO Hayden Adams announced the launch of the much-anticipated UniswapX Protocol. According to the company statement, the Dutch auction-based protocol will “grow onchain trading and improve self-custody swapping” across different liquidity sources.

Will the early positive impact on UNI price evolve into a bull rally?

Uniswap User Activity is on the Rise

The UniswapX protocol launch appears to have triggered a positive response among Uniswap network participants. The number of Daily Active Addresses (DAA) has been rising for 3 consecutive days considerably this week.

The Santiment chart below reveals how Uniswap DAA has increased by 22% from July 15 to July 18.

Uniswap (UNI) Price Gains | Daily Active Addresses, July 2023. Source: Santiment

Daily Active Address tracks real-time changes in network activity by aggregating the number of individual wallet address carrying out transactions. A sharp rise in DAA, as observed on the Uninswap network this week, indicates growing demand for the asset.

If the beta-testing of the UniswapX protocol is successful, the Uniswap DAA could rise even further. Hence, the bulls could continue to hold out for more price gains rather than sell.

Long-Term Holders are Positioning for Future Price Gains

Early on-chain signals show that long-term investors are holding out for UNI to add to its 15% gains in July rather than sell. The Mean Coin Age data compiled by Santiment validates this stance.

The chart below depicts that between July 15 and July 19, UNI Mean Coin Age increased by 12% from 20.05 to 22.41.

Uniswap (UNI) Price Gains | Mean Coin Age, July 2023. Source: Santiment

By dividing the total coin age by the total coin supply, the Mean Coin Age metric evaluates the trading sentiment among current holders of a cryptocurrency.

A persistent surge in Mean Coin Age is considered a bullish signal, indicating that investors are holding their tokens longer on average.

In summary, the rising network activity and network-wide accumulation trend suggest that UNI could be poised for more gains.

UNI Price Prediction: $8 On the Cards

Considering the bullish indicators highlighted above, bullish investors could anticipate a move toward reclaiming $7.

However, IntoTheBlock’s GIOM data clearly shows that the $6 resistance remains a daunting challenge for the bulls. At that zone, 16,630 investors had bought 23.8 million UNI tokens at an average price of $6.38.

Once Uniswap approaches $6, these investors could begin to sell and inadvertently slow down the rally. Nevertheless, if Uniswap gains momentum as predicted, UNI could head toward $8.

Uniswap (UNI) Price Prediction | GIOM data, July 2023. Source: IntoTheBlock

Yet, the bears could seize the narrative if Uniswap price drops unexpectedly below $5. Although, the 25,280 that bought 44.4 million UNI at that minimum price of $5.19 will likely prevent the drop.

But if that critical support level fails to hold, the UNI price could enter an unlikely bearish reversal toward $4.50.