Uniswap [UNI] prices continued to dive lower, where will it see some respite?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Uniswap had a strong bearish outlook in the lower timeframes
- The confluence of a higher timeframe demand zone and range lows highlighted a critical area on the price charts
Uniswap [UNI] has been in an uptrend on the daily timeframe since early July. August saw the bulls face rejection at $6.7, marking a potential range that the token would trade within in the coming weeks.
Read Uniswap’s [UNI] Price Prediction 2023-24
Bitcoin [BTC] dropped from $29.6k on 14 August to trade at $29.1k at press time. Although this was only a 1.66% drop, it has affected the sentiment in the altcoin market heavily. Uniswap faced intense selling pressure over the past 24 hours.
The swift recent losses showed the range lows might not be defensibleThe range formation (green) for UNI extended from $5.7 to $6.7. Over the past week, the mid-range mark at $6.2 saw some skirmishes between buyers and sellers, but a conclusive winner did not emerge until 15 August.
The strong selling pressure forced UNI to nosedive below the $6.2 and $6 levels. At the time of writing, UNI was trading at $5.84 and within a bullish order block on the daily timeframe. This demand zone had confluence with the range lows as well.
Therefore, if a reversal were to occur, this would be the ideal spot. Yet, the OBV jumped below a short-term support level as selling volume rocketed higher. If BTC losses continued, it looked very likely that UNI would drop to the next zone of support at $5.2. A drop below $5.7 and a retest of the same could offer a shorting opportunity.
The spot CVD began to reverse its uptrend as bearish sentiment intensifiedOver the past week the spot CVD was in a healthy uptrend. But the shift in sentiment over the past two days meant the bears were back in control. The sharp price drop was accompanied by a slide in the Open Interest. It also saw a large number of long liquidations.
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This showed long positions were forced to sell as prices hit liquidation levels. It was also accompanied by a drop in the spot CVD, showing sellers were wholly dominant in the short term.