The price of Uniswap (UNI) has experienced a decline for the fourth consecutive day, raising concerns among investors as the cryptocurrency grapples with a bearish market sentiment. Recent on-chain metrics, including total value locked (TVL) and chain fees, have shown a downward trend, leading to the formation of a double top pattern. This technical setup, if validated, could indicate further declines for the token.
As of January 1, Uniswap was trading at $5.64, reflecting a 12.5% drop from its peak earlier in the week and a staggering 53% decrease from its August highs. This decline mirrors the broader challenges faced by the cryptocurrency market, as many investors adopt a risk-averse posture amidst Bitcoin“s lackluster performance over recent months, which has adversely affected altcoins, including UNI.
Compounding these issues, Uniswap is contending with intensified competition from decentralized exchanges (DEXs) such as PancakeSwap and Raydium, which have further squeezed trading volumes and reduced protocol fees. According to data from DeFiLlama, the total value locked across all DeFi protocols on the network has plummeted from $6.9 billion in early October 2025 to around $4 billion at present. Additionally, the weekly fees generated have also seen significant declines, heightening the pressure on prices unless there is a shift in fundamentals.
Despite the recent downturn, a noteworthy development for the Uniswap ecosystem emerged over the weekend that could reshape the long-term outlook for UNI. The protocol has officially transitioned to a deflationary model following the activation of the UNIfication proposal. This initiative has implemented a fee switch and burned $596 million worth of UNI tokens, effectively reducing the circulating supply. Such token burns typically lead to an increase in value, assuming demand remains stable or increases.
Analyzing the price action on the 4-hour chart reveals that Uniswap has established a double top pattern over the past two weeks. This bearish reversal pattern occurs when an asset”s price peaks twice, with a moderate decline between the two peaks. For UNI, these peaks are positioned around the $6.5 mark, while the neckline is identified at $5.59, which is just below its current trading price.
Technical indicators suggest a prevailing bearish outlook for Uniswap. The price remains below the 50-day Simple Moving Average at $5.93, indicating that bearish sentiment is dominating the trend. The Aroon down indicator stands at 85.71%, while the Aroon Up is at 7.14%, confirming the ongoing downward momentum. A crucial support level to monitor is the neckline at $5.59; a breach below this level could drive prices down to approximately $4.70, calculated by subtracting the height of the double tops from the neckline level, representing a potential decline of nearly 16% from current prices.
However, if Uniswap manages to recover above the 50-day SMA, the current bearish setup could be invalidated, providing a glimmer of hope for investors seeking a reversal in the token”s fortunes.
