Uniswap drops to a key bullish zone – Is a pivot likely?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- UNI’s retracement has hit a crucial bullish zone
- Sell signals were strong as per liquidations data
Uniswap’s [UNI] could offer a risky buying opportunity on the higher timeframe charts. Bulls faltered after climbing above the June high and hitting $5.8. However, the pullback has eased to a crucial confluence area of a bullish order block and May support area – which could offer a re-entry position for bulls if BTC maintains above $30k.
How much are 1,10,100 UNIs worth today?
At the time of writing, BTC’s price was $30.18k and has been flashing selling signals in the past few days amidst dissipating ETF-induced hype that saw it grace new highs in Q2/Q3 2023.
Will this bullish zone rescue bulls?
At the peak of UNI’s rally at the end of June, bulls cooled off, setting UNI to pull back to May support near $4.95. The pullback was marked by a bullish order block of $4.75 – $5.1 (cyan), making the May support a bullish stronghold.
A positive price reaction at the bullish zone, especially if BTC doesn’t fall below $30k, could offer a buying opportunity, targeting the recent high of $5.8. However, cautious traders could set $5.5 as the primary target, with both set-ups offering >2 RR (Risk Reward).
A drop below the bullish zone will invalidate the above bullish thesis. A crack of this zone could expose UNI to further devaluation to $4.5 or $4.0.
Meanwhile, the Relative Strength Index (RSI) dropped below the neutral level of 50; denoting eased buying pressure. Similarly, the Chaikin Money Flow (CMF) moved southwards, reinforcing a decline in capital inflows.
More long positions discouraged
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According to Coinglass liquidations data, UNI has seen more long positions wrecked on 10 July. For example, over $170k worth of long positions were liquidated against less than $10 of short positions in the same period.
The trend reinforces bearish sentiment and calls for caution for bulls. Investors should track BTC price action for better clarity and direction.