Uniswap price fall is imminent; investors seem to be prepared for the same

Uniswap price noted significant gains in the last two months, and this bullish momentum is now likely set to end. This could lead to some drawdown in price action, which, interestingly, the investors are already prepared for, as observed in their behavior.

Uniswap price to paint red on the chart

Uniswap price trading at $6.1 has proved to be one of the best-performing assets in the last 30 days as the DeFi token charted a more than 35% increase rising from $4.5 to present market value. In this duration, the investors made their fair share of profits as the altcoin hit a three-month high, but that is likely about to change.

The Relative Strength Index (RSI) is inching closer to the overbought zone above the 70.0 mark and is set to breach soon. Any asset touching this area usually suggests that the market is overheated and would need to cool down before it can begin rising again. This cool-down is generally accompanied by some corrections.

UNI/USD 1-day chart

Similarly, the Market Value to Realized Value (MVRV) ratio is also in the danger zone. Crossing the threshold of 10% has always resulted in corrections for the asset historically, as the investors are very motivated to sell for profits at this time. Thus as these conditions are met, UNI holders can expect some drawdown.

Uniswap MVRV ratio

However, they seem to be prepared for the same as just as the altcoin reached the brink of corrections, investors' activity slowed down. Active deposits began slowing down, and at the same time, HODLing became a priority. This is reflected in the fact that in the last ten days, more than 22 million UNI tokens worth $134 million moved from the mid-term holders' addresses to long-term holders. 

Uniswap supply distribution by time held

Put simply, this supply has been untouched for more than 12 months now and even presently, investors are not looking to engage in profit-taking. Instead, they are holding on to it, which would be helpful to prevent a severe drawdown once corrections hit Uniswap price.