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.