Uniswap Whale Faces $1.86M Loss Amid Market Dip, But Legal Win Boosts DeFi Confidence

• A Uniswap whale deposited $13.71M in UNI on Kraken, facing a $1.86M loss despite a past unrealized peak profit of $26.5M. 
• UNI’s price struggles within a descending channel, with RSI at 41.09 signaling neutral momentum and slight accumulation interest. 
• A court ruling shields Uniswap from liability for third-party misuse, reinforcing legal protections for DeFi developers

A major Uniswap (UNI) holder recently deposited 2.25 million UNI tokens, worth $13.71 million, to the Kraken exchange. Lookonchain reported that the whale had accumulated these tokens at an average price of $6.92 between September 2023 and November 2024. Despite achieving an unrealized profit of $26.5 million at the peak, the investor is now facing a loss of $1.86 million. The current price of UNI stands at $6.087, reflecting a slight 1.37% recovery in the latest trading session.

Market Dynamics and Technical Indicators

The UNI price chart on Coinbase reveals a persistent descending channel pattern , marked by lower highs and lower lows. This confirms the prevailing bearish trend over recent weeks. The price recently rebounded after touching the lower boundary of the channel, indicating potential short-term support. However, resistance remains near the upper trendline, where past price rejections have occurred.

The Relative Strength Index (RSI) currently sits at 41.09, suggesting that the asset is neither overbought nor oversold. The recent RSI upward movement from the oversold region signals growing buying interest. Meanwhile, the Accumulation/Distribution (A/D) line remains negative at approximately -15.88 million, highlighting sustained selling pressure. Yet, a slight upward shift in the A/D line suggests some accumulation activity.

If buying momentum strengthens, UNI could test the upper boundary of the channel. A successful breakout might indicate a potential trend reversal. However, failure to breach resistance could result in further price declines.

Legal Victory Strengthens DeFi Protections

In a landmark court decision, the Second Circuit Court of Appeals ruled in favor of Uniswap Labs. The court described how writers of neutral, decentralized software cannot be held liable for third-party abuse. The suit was regarding allegations that Uniswap enabled scam tokens to be traded, contrary to US securities laws.

The court affirmed that the smart contracts of Uniswap are self-executing programs, and not direct contracts with the users. It compared the platform’s role to that played by the role of Nasdaq or New York Stock Exchange, which are in no way liable for the fraudulent activities of third parties.

This ruling marks a pivotal moment for DeFi developers, reinforcing that decentralized protocols serve as frameworks for transactions rather than direct participants. Consequently, this decision offers stronger legal protection for developers against third-party misuse claims, strengthening the foundation of the decentralized finance ecosystem.