Uniswap’s recovery falters near post-FTX levels
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- UNI hiked 14%, reversing steep losses seen on 10 June.
- H4’s market structure was bearish at the time of writing.
Uniswap’s [UNI] extended drop in the first half of June smashed January lows and the post-FTX level of $4.710. But the DEX (Decentralized Exchange) token eased at $3.633 and inflicted a strong rebound, hiking 14% to around $4.43 at the time of writing.
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UNI’s price action retraced slightly after rejection, just below the post-FTX level of $4.710. In the meantime, Bitcoin [BTC] temporarily crossed the $26.6k mark but was yet to flip bullish on the higher timeframe.
Will the 50% Fib level rescue bulls?
A Fibonacci retracement tool (yellow) was placed between the swing high at the end of May and the June low on the 4-hour chart. The 61.8% Fib level of $4.61, below the post-FTX level, was a key resistance for the past few days.
The 38.2% Fib ($4.24) and 50% ($4.42) Fib levels have acted as immediate support levels during the recovery period’s recent pullbacks. At the time of writing, UNI hit the 50% Fib level ($4.42), and could breach it if BTC falls below $26.6k.
So, sellers must clear the obstacles at 38.2% Fib ($4.24) and 50% ($4.42) Fib levels to extend gains to $4.00 (23.6% Fib level).
An upside move could be feasible if UNI flips bullish by crossing the post-FTX level of $4.710 and the 78.6% Fib level ($4.87).
Meanwhile, the RSI (Relative Strength Index) declined below the 50-mark, and OBV (On Balance Volume) registered a downtick – suggesting a dip in buying pressure and demand.
The futures market is bearish
The open interest (OI) rates and the number of futures contracts linked to UNI declined massively between 10-12 June. It dropped from >$43 million on 10 June to about $31 million by 12 June. Moreover, it peaked at $39 million on 15 June before dropping again.
How much are 1,10,100 UNIs worth today?
The declining OI shows growing bearish sentiment in the futures market in the second half of June.
Additionally, Uniswap’s Exchange Long/Short ratio corroborated the above inference, with shorts commanding dominance at 53.95% in the 4-hour timeframe. The negative derivative metrics could delay the prospects of the H4 structure flipping bullish.