UNI Investment Analysis: Assessment of a 40% Upside Driven by the UNInception Proposal
Brief summary
UNI current price : $9.81 (+47%, 24 hours) coindesk
The 40%+ surge driven by the UNIFICation proposal reflects strong momentum, but the technicals are severely overbought and on-chain distribution signals have emerged. It is recommended to wait for a pullback to the $8.75-$9.39 range before gradually building positions, as there is a 10-20% risk of a correction in the short term.
Core Analysis
UNIFication Proposal Details
Key measures :
- One-time destruction of 100 million UNI : approximately 16% of the circulating supply, valued at ~$800 million, to compensate for losses from historically inactive fee switches . gov.uniswap.org
- Protocol fee switch activated : v2 pool charges 0.05% fee, v3 pool charges 1/4 to 1/6 of LP fee, estimated annual burn of $10-20 million UNI.
- Unified Ecosystem Team : Labs and Foundation merge, securing a 20 million annual UNI growth budget.
- MEV internalization mechanism : Provides LPs with an additional $0.06-$0.26/$10k transaction revenue through PFDA auctions.
- Zero front-end fees : Eliminate interface, wallet, and API fees to boost organic trading volume.
Proposal Status : Currently at the RFC stage, not yet in the Snapshot voting stage (uniswapfoundation.org)
Social sentiment analysis
Overall sentiment : 80% bullish, primarily driven by excitement stemming from supply destruction and fee revenue.
Key support voice :
- Hayden Adams (Founder) emphasizes the importance of aligning ecosystem incentives.x.com
- Ryan Sean Adams (Bankless) celebrates regulatory good news of "the end of the Gensler era" x.com
- Mike Dudas believes that being bearish on cryptocurrencies now reflects poor judgment . (x.com)
Questions raised :
- Base ecosystem competitors believe that the fee switch will reduce LP yields . (x.com)
- Aerodrome associates view this as a defensive measure . (x.com)
Technical Analysis
| Timeframe | trend | RSI | MACD | Key level | Signal |
|---|---|---|---|---|---|
| 1 hour | bullish | 85 | bullish | $9.70 | 🔴 Strong upward trend but overbought conditions continue |
| 4 hours | bullish | 88 | bullish | $8.75 | 🔴 Momentum continues, extremely overbought |
| Daily chart | bullish | 76 | bullish | $8.63 | 🟡 Overextended rebound |
Key price levels :
- Support levels : $9.39 (mild), $8.75 (strong), $7.90 (strong)
- Resistance levels : $10.35 (mild), $10.51 (strong)
Derivatives data :
- Open interest : Up 131% to $810 million - indicating continued buying interest but excessive leverage
- Funding fee : +0.01% (Binance, 8 hours) - Longs paying shorts indicates a bullish bias.
- Liquidation risk : Cumulative long exposure below $9.79 is $25M; cumulative short exposure above $10.51 is $73M.
On-chain analysis
Holder distribution : The top 25 holders control approximately 53% of the supply, and the distribution remained stable within 12 hours of the announcement.
Key flows :
- Binance net inflow : +3.2 million UNI (~$31.6 million) - indicating that users deposited funds into the exchange that may be used for selling.
- Exchange reserves : Up 9% to 86.7 million UNI in 30 days - Increased seller liquidity suggests potential selling pressure.
- Large-scale investor activity : Following the announcement, only inflows into CEXs were observed, with no large-scale purchases or treasury activity.
Trading strategy recommendations
| Scene | Entrance | Target | Stop loss | Risk-reward ratio | Rating | Success probability |
|---|---|---|---|---|---|---|
| 🟢 Bullish trend continues | $9.50-$9.70 | $10.35 | $9.39 | 3.57 | excellent | Medium (support level needs to be held) |
| 🔴 Shorting on short | $9.70 | $8.75 | $10.00 | 3.17 | excellent | High (overbought + inflow) |
Recommended strategy :
- Short term : Wait for a pullback to the $8.75-$9.39 range to gradually build positions.
- Medium term : If the $9.39 support level holds, the target is $10.35.
- Risk management : Strict stop-loss orders are in place, and attention should be paid to whether the funding rate exceeds 0.05%.
Investment advice
Is it a good time to buy ? Cautiously optimistic; it's recommended to wait for a pullback.
Positive factors :
- Strong fundamental catalysts (burn mechanism + fee activation)
- Ecosystem integration improves operational efficiency
- The timing advantage of an improved regulatory environment
- Community sentiment is generally positive
Risk factors :
- Technically, the market is severely overbought; historically, the RSI 85-88 level has been accompanied by pullbacks.
- On-chain data shows net inflows to exchanges (distribution signal).
- The proposal still requires governance voting, and its implementation remains uncertain.
- Increased competition (especially from challenges from the ve(3,3) pattern)
Conclusion : The UNIFICation proposal has long-term value, but the current price level carries significant risk. It is recommended to wait for a technical pullback to the $8.75-$9.39 range before gradually accumulating positions, and to monitor the progress of the governance vote and the actual activation time of the fee switch during the holding period.