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Uniswap: Analyzing the why behind UNI’s recovery that halted at $13

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Uniswap bulls halted at $13, unlucky or a simple case of a lack of conviction from buyers?

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Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

Uniswap was on a relentless downtrend as the bears sought to drive prices below $8.22, and a lack of demand was evident. The bearish trend hinged on two levels at press time. Even though the exchange is one of the largest decentralized exchanges, its token has had a rough time on the charts in recent months.

UNI- 3 day chart

Uniswap bulls halted at $13, unlucky or a simple case of a lack of conviction from buyers?

Source: UNI/USDT on TradingView

The 3-day chart was employed to understand the severity of the downtrend that UNI has been on. The coin formed a high at $45 in May but has not been able to post a higher high since. Moreover, following the rally in August, the price of the token began to slump on the charts once more. The $30 level refused to be breached.

In the past few months, the price has continued to register a series of lower highs and lower lows, characteristic of a downtrend.

The Fibonacci extension levels (yellow) were plotted based on UNI’s move from $31.41 down to $13.18 and gave a 27.2% extension of this move southward at $8.22. Incidentally, $8.2 has been a place where some demand was seen in the past month.

That said, the bounce was unable to climb past $13 and the market structure continued to be bearish.

Rationale

Uniswap bulls halted at $13, unlucky or a simple case of a lack of conviction from buyers?

Source: UNI/USDT on TradingView

The 3-day RSI has been below the neutral 50 line since late October. It tried to poke its nose back above but was unable to as the price was rejected at $12.49. The Chaikin Money Flow was also below the -0.05 mark to denote strong selling pressure.

The OBV saw a sharp bounce in the past month, but even the OBV has been on a downtrend for nearly a year.

Conclusion

For the bulls, a move past $13 would be necessary for Uniswap to break the bearish market structure. On the other hand, the bears will be looking to drive the price back below the psychological $10 level, and push it beneath $8.2 as well.

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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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