Uniswap price extended its losing streak for a fourth straight session, reflecting broader weakness across the crypto market and declining on-chain fundamentals.
At last check on Jan. 1, UNI was trading at $5.64, down 12.5% from its weekly high and nearly 53% below its August peak, according to market data. Risk aversion across digital assets driven in part by Bitcoin’s subdued performance has weighed heavily on altcoins, including UNI.
Competition and falling activity pressure fundamentals
Uniswap has also faced intensifying competition from rival decentralized exchanges such as PancakeSwap and Raydium, which has siphoned off trading volume and reduced protocol fee generation.
On-chain data underscores the slowdown. According to DeFiLlama, total value locked (TVL) across Uniswap-based DeFi protocols has fallen sharply from $6.9 billion in early October 2025 to around $4 billion at the time of writing. Weekly fees generated by the protocol have also declined significantly over the same period.
Together, falling TVL and lower fees suggest cooling network activity, a combination that often translates into sustained price pressure unless reversed.
Deflationary shift offers long-term support
Despite the near-term weakness, Uniswap recorded a major structural milestone over the weekend.
Following the activation of the UNIfication proposal, the protocol implemented its long-awaited fee switch and burned roughly $596 million worth of UNI, officially making the token deflationary. The proposal also introduced a permanent token-burning mechanism, reducing circulating supply over time.
While token burns do not guarantee immediate price appreciation, they can support long-term value if demand stabilizes or grows, partially offsetting bearish fundamentals.
Uniswap technical analysis: double top raises red flags
From a technical perspective, UNI’s chart structure remains fragile.
On the 4-hour chart, Uniswap has formed a double top pattern over the past two weeks a classic bearish reversal signal. The two peaks have formed near the $6.50 level, while the neckline support sits around $5.59, just below current prices.
Momentum indicators reinforce the bearish bias:
- UNI remains below the 50-day Simple Moving Average (SMA) at $5.93
- The Aroon Down indicator stands at 85.71%, while Aroon Up is just 7.14%, signaling strong downward momentum
A confirmed break below the $5.59 neckline could open the door to a decline toward $4.70, a level derived from the height of the double-top formation roughly 16% below current prices.
Key level to watch
The bearish setup would be invalidated if UNI manages to reclaim and hold above the 50-day SMA, which could shift momentum back in favor of buyers.
Until then, Uniswap price remains vulnerable, caught between weak on-chain metrics, rising competition, and a fragile technical structure, even as longer-term deflationary changes offer a potential silver lining.
Disclosure: This article is for informational purposes only and does not constitute investment advice.
