Uniswap sweeps short liquidations near $5 — What next?
Uniswap's recent bullish structure could have a significant impact on its price action.
Uniswap [UNI] continued its strong bullish performance with another bullish structure break on the daily timeframe on Thursday, 27th August. On the day, the DeFi altcoin rallied by 6.89%, from $4.38 to $4.68.
In the hours before press time, however, it faced a rejection after moving further north to $4.84. It was trading at $4.57, at the time of writing.
Coinalyze data revealed that Open Interest has cooled down slightly, with the funding rate close to neutral levels. Encouragingly, the Spot CVD climbed on the charts in recent days to underline strong spot demand behind the price gains.
Whale accumulation and steady UNI token burns have helped maintain the scarcity narrative. Hence, the question: Are the spot demand and bullish narratives enough to keep the uptrend going?
Explaining the bullish Uniswap structure
In May, a lower high at $4.17 was registered, after which a wave of selling sent UNI’s price to a low of $2.31 by early June. By the end of July, this high had been surpassed, bringing a bullish swing structure into effect.
A pullback to $3.18 in mid-August was followed by another rally past the $4.57 local high, once again affirming the bullish structure.
The OBV has been trending higher since July to show steady buying. In particular, demand accelerated in mid-August. The momentum shift of the past two weeks was also evident on the MACD and the Awesome Oscillator.
Traders’ call to action – Buy the pullback
The dense magnetic zones above $4 that were built up over the past month have been swept up. An approach of the $5-level was also made in recent hours, taking out another cluster of short liquidations.
A noticeable pocket of long liquidations may be beginning to build up around $4.
From the daily chart presented earlier, the bullish price targets of $5.11 and $5.97 remain valid. However, a consolidation phase could take shape in the coming days to build up the next liquidity pockets for UNI’s price to target.
Final Summary
- Uniswap had a bullish structure on the daily timeframe price charts at press time.
- Sweep of the overhead liquidity pockets and the subsequent rejection from below $5 could give way to a short-term consolidation phase.
