UNI Rally Fades as Retail Demand Wanes Amid Overstretched Momentum

Uniswap (UNI) has been on a tear, rising over 80% in just two weeks. However, its recent rally is showing signs of fatigue, with the price capped below $6.00 and facing fresh selling pressure. Retail demand for UNI is waning, as evidenced by a 12% decline in Open Interest (OI) to $480.85 million over the last 24 hours.

The technical outlook for UNI suggests a downside bias, with momentum indicators signaling an overstretched rally. The Moving Average Convergence Divergence (MACD) is holding above its signal line, while the Relative Strength Index (RSI) at 74 flags overbought conditions. If UNI breaks below the recent breakout area around $4.74, it could re-test support at the 50-day Exponential Moving Average (EMA) at $4.15.

Despite the waning retail demand, traders are still inclined to take long positions on UNI, with an OI-weighted funding rate of 0.0094% suggesting a premium for holding bullish positions. However, this comes with a higher risk of liquidation, as evidenced by $2.15 million in long liquidations over the last 24 hours.