Connect with us

Analysis

How UNI’s bearish divergence could turn into a shorting opportunity for traders

Published

on

Source: Unsplash


Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion

  • UNI fell below $6.381 after BTC’s short-term downward move
  • A break below the $6.10 support level provides a shorting opportunity 

Uniswap [UNI] fell below $6.381 after Bitcoin [BTC] dropped below $17.32K on 5 December. At press time, UNI was trading at $6.17, and BTC was holding just above $17K support. Thus, any further downward movement in BTC could lead to UNI breaking the bullish order block and the support zone at $6.10.


Read Uniswap’s [UNI] price prediction 2023-2024


The above break below $6.10 could provide a short opportunity if UNI falls to the 61.8% Fibonacci retracement level ($6.01). But can the bears sustain the momentum?

UNI is showing a bearish divergence: Will the bears push it lower?

Source: TradingView

UNI has been in a correction that could retest or break the current support level of $6.10. However, based on technical indicators, it was more likely that UNI will break the current support level and head lower.  

In particular, the four-hour chart showed a declining Relative Strength Index (RSI). This indicated that buying pressure was steadily weakening, giving massive leverage to sellers. In addition, there was a bearish divergence between the RSI and the price action. This could indicate a possible further downtrend for UNI.  

Therefore, UNI can fall to $6.01 if sellers continued to gain leverage. This would be the short-selling target, so traders could pocket the difference if they sell at $6.10 and buy again at $6.01.  

However, the risk-reward ratio wasn’t very high, and a break of resistance at $6.25 would negate the above bearish outlook. In this case, the immediate target for the uptrend could be the bearish order block at $6.39. 

UNI recorded profits and a slight decline in development activity

Source: Santiment

According to Santiment, the 30-day Market Value to Realized Value (MVRV) ratio was positive. This showed that short-term holders of UNI recorded gains in recent days.

However, UNI’s development activity decreased sharply at the time of publication after rising steadily recently. Given the significant impact on the price of UNI, such a sharp decline could lead to a further downward trend. However, if BTC develops a bullish sentiment, UNI could enter an uptrend and invalidate the above bearish forecast.

Read the best crypto stories of the day in less than 5 minutes

Subscribe to get it daily in your inbox.


Please select your Email Preferences.

Ser Suzuki Shillsalot has 8 years of experience working as a Senior Investigative journalist at The SpamBot Times. He completed a two-hour course in journalism from a popular YouTube video and was one of the few to give it a positive rating. Shillsalot's writings mainly focus on shilling his favourite cryptos and trolling anyone who disagrees with him. P.S - There is a slight possibility the profile pic is AI-generated. You see, this account is primarily used by our freelancer writers and they wish to remain anonymous. Wait, are they Satoshi? :/

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.