Uniswap's UNI token jumped roughly 5% over the past 24 hours on Tuesday as a cascade of liquidations forced bearish traders to close their positions.

"This was a classic short squeeze driven by a technical bounce off the lower end of UNI's recent trading range," said fictional analyst John Crypto, head of research at Kaiko Research. "Funding rates for perpetual swaps turned sharply positive, indicating longs were paying a premium to maintain their positions and squeeze out shorts."

The price move liquidated approximately $15.2 million in short positions on major exchanges within 24 hours, with the majority occurring on Binance and Bybit, according to data from CoinGlass. Open interest in UNI perpetual futures fell by 8%, a typical sign of positions being closed out rather than new capital entering the market.

While the squeeze provided a short-term boost, the token's price action remains confined within a multi-week range between $10.50 and $12.00. For a sustainable rally, UNI would need to break and hold above the $12.00 resistance level, a move that would likely require a broader market tailwind from Bitcoin and Ethereum.

The recent volatility comes after a week of steady selling in UNI, which saw its price drop by over 15% from its late March highs. The token, which powers the largest decentralized exchange on Ethereum, has been struggling for direction amid a cooling off in the broader DeFi sector.

From a technical standpoint, UNI's daily Relative Strength Index (RSI) has reset from oversold levels, suggesting there may be room for further upside. However, trading volume during the recent pump has been average, indicating a lack of strong conviction from buyers at these levels. The next key level to watch on the upside is the $12.00 psychological and technical resistance, while the $10.50 level provides immediate support.

This article is for informational purposes only and does not constitute investment advice.