Roughly $1 billion in Ethereum will be released from Uniswap leading to a spike in selling pressure

  • Uniswap farming will end on November 17, releasing all the funds locked inside.
  • Around $1.1 billion in ETH will be released ‘into the wild,’ potentially leading to a spike in exchange inflow. 

Uniswap conducted the first community call to discuss the upcoming actions after UNI farming ends on November 17. The largest decentralized exchange had four ETH-based liquidity pools running since September 17, rewarding users with 583,333 UNI per week, per pool. However, as no decision has been taken and there are no proposals to extend or launching new pools, these funds of around $1.1 billion worth in ETH could be released into the market, potentially increasing supply and pushing down Ethereum price.

Investors are now concerned about UNI and Ethereum prices. For instance, UNI holders could begin dumping their mined UNI as incentives dry up. Similarly, the $1.1 billion in ETH could be either sold or re-invested into something else.

The main idea behind stopping the UNI farming pools is to help Uniswap price in the long-term. More than $2.3 billion in digital assets were locked inside UNI pools ranging from DAI, USDC, USDT, WBTC, and ETH.

Can Ethereum price survive the potential increase in selling pressure?

It’s important to note that although the pools will not reward users with UNI tokens anymore, liquidity providers will continue profiting from fees. This indicates that some of the Ethereum locked inside will remain there.

These pools were open since September, and Ethereum price has increased by 50% in this time period. It seems likely that many investors will sell their ETH coins, although there are other possibilities as well. For instance, they could stake them somewhere else, especially now that so many new DeFi yield farming pools are created. It’s also possible that they will simply hold.

However, there is also another factor to keep in mind. Investors could have withdrawn their ETH coins at any time as the pools did not have a locking period. This adds support to the idea that most investors will continue holding Ethereum somewhere else.

Ethereum price is currently $470 and had a notable breakout on November 11 from a triangle formed on the 4-hour chart. The digital asset has re-tested the upper trendline of the pattern three times, successfully defending it.

eth price

ETH/USD 4-hour chart

Using the height of the pattern, the next price target remains at $488, which is the 2020-high established on September 1. Despite the potential increase in selling pressure, it’s also worth noting that the crypto market’s sentiment remains positive.

eth price

ETH IOMAP chart

On the other hand, if it turns out that a lot of Ethereum coins do end up on exchanges and selling pressure increases, Ethereum price could fall towards $429, which is the most significant support according to the In/Out of the Money Around Price (IOMAP) chart.