Uniswap is struggling with sustaining the uptrend after bouncing off support at $17.2. The break above $20 was a bullish signal for the decentralized finance (DeFi) token; however, bulls lost steam slightly above $22.

Uniswap must defend the 50 SMA support

UNI is dancing at $21.46 at the time of writing. The price is sitting on the 50 Simple Moving Average on the 4-hour chart, an immediate support area. Notably, this area coincides with the 61.8% Fibonacci level.

Holding above the crucial support is vital to pushing the recovery further. On the upside, the 78.6% Fibonacci level at $22.4 is the near-term hurdle. If the above support is protected, buyers will be allowed to shift their focus on this resistance. A break above the seller centration zone will pave the way to all-time highs and place Uniswap on the path to new record highs toward $30.

UNI/USD 4-hour chart

The IOMAP chart, developed by IntoTheBlock, shows that minimal hindrances exist ahead of Uniswap. In other words, a rally is anticipated if the subtle selling pressure at $21.7 to $22 is overcome. Here, only 51 addresses had bought roughly 438,000 UNI.

On the downside, Uniswap is sitting on top of a zone with a massive concentration of buyers. This area runs from $20.1 to $20.7. Here, around 6,700 addresses had previously purchased roughly 20.1 million UNI. It is doubtful that Uniswap will slice through this zone and explore the levels toward $17.2 (recent support).

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Uniswap IOMAP model

Looking at the other side of the picture

The pessimistic outlook may hold based on the declining network growth, as highlighted by Santiment’s on-chain metrics. The network growth model tracks the number of newly-created addresses on the protocol daily. A consistent drop in this metric reveals that Uniswap is unlikely to have the strength to continue with the uptrend.

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Uniswap network growth

For instance, the addresses joining the network topped out around 5,900 on January 31. Since then, the addresses have declined to the prevailing 3,380, representing a 42% loss. If the uptake of addresses keeps dropping, it will be challenging for UNI to lift higher. Moreover, the adoption of the project will also be negatively influenced.