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UNI has a bullish bias despite the 8.45% dip in the last few hours, here’s why

2min Read

Uniswap traders could be justified in entering long positions but they must temper their expectations of profit with caution.

Uniswap revisits a vital retracement level, can the bulls reverse the recent losses?

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

  • Uniswap indicators showed a lack of buying pressure behind the token, especially after its recent pullback
  • Even though multiple factors suggested otherwise, it was possible that the bulls could force a rally toward $4.5 or beyond

Uniswap [UNI] fell below the lows of a month-long range in mid-October. However, the subsequent downtrend took UNI only as low as $3.83 before the bulls entered the market in numbers.

Read Uniswap’s [UNI] Price Prediction 2023-24

The recovery saw a healthy retracement and the market showed promising signs, but the on-chain activity of the Uniswap Foundation could worry the bulls. The decline in Total Value Locked (TVL) was also a concern.

The Fibonacci retracement levels promised another rally for UNI

Uniswap revisits a vital retracement level, can the bulls reverse the recent losses?

Source: UNI/USDT on TradingView

The price action of UNI on the four-hour chart revealed a bearish market structure. Additionally, the Relative Strength Index (RSI) also slipped below neutral 50 to indicate bearish momentum. Yet, the recent drop represented a viable buying opportunity.

Fibonacci retracement levels (pale yellow) noted that the $3.97 level was the 78.6% retracement level for the recent move to $4.5. Therefore, traders could be justified in going long. However, they must temper their expectations of profit with caution.

The On-Balance Volume (OBV) has been in a downtrend since August. The Chaikin Money Flow (CMF) spent the majority of October under the +0.05 level, only occasionally climbing higher. The inference was that capital inflow was not significant despite the price gains, which suggested a lack of demand for UNI.

The sentiment was firmly bullish from futures traders

Uniswap revisits a vital retracement level, can the bulls reverse the recent losses?

Source: Coinalyze

The Open Interest (OI) chart trended higher over the past three days, even though UNI saw a deep pullback. Each price bounce was accompanied by a rise in the OI, although there were instances when short-sellers capitalized on rapidly dropping prices.

Is your portfolio green? Check the Uniswap Profit Calculator

In the past few hours, UNI climbed from $4.01 to $4.1 and the OI rose by close to $2.5 million worth of contracts. This suggested sentiment was bullish in the short term. On the other hand, the spot Cumulative Spot Delta (CVD) noted a slow but steady decline since 25 October.

Once more, it was a clue that buying pressure was weak at the time of writing. Despite these shortcomings, a long position targeting $4.5 with invalidation just below $3.97 made sense from a price action perspective.


Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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