Uniswap’s [UNI] recovery blocked: Will bulls find footing in key demand zone

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• UNI faced price rejection at the descending trendline.
• Bulls could be hopeful if a key demand zone is retested and defended.

Unsiwap’s [UNI] recent recovery attempts have to contend with a few obstacles. Besides Bitcoin [BTC] fluctuating around $28k, UNI has faced price rejection at a month-long descending trendline. 

At press time, UNI had dropped to $5.854 support. A breach below it and subsequent retest of the key demand zone could offer bulls new buying opportunities. 

Read Uniswap’s [UNI] Price Prediction 2023-24

Will the $5.854 support hold?

Source: UNI/USDT on TradingView

The $5.228 – $5.511 range has been a key support and demand zone in 12-hour and lower timeframe charts. Two previous retests led to recovery, and a repeat of the trend may result in a rebound and discounted buying opportunity. 

A breach below $5.854 could attract increased sell pressure. Therefore, UNI may drop to the demand zone of $5.228 – $5.511 before a likely rebound from aggressive buying at these levels. The retest and an uptrend confirmation could offer new buying opportunities with targets at $5.854 and the descending trendline around $6.1.

A close below the support range at $5.235 will invalidate the above thesis. The next likely support in such a downswing scenario will be $4.964. 

Meanwhile, the RSI faced rejection at the 60 mark and dropped below its equilibrium – denoting a dip in buying pressure. If confirmed, a pending bearish MA crossover could expose UNI to more sell pressure. Moreover, OBV (On Balance Volume) declined, indicating a drop in demand for UNI in the past few days.

The funding rate was positive and mean age rose

Source: Santiment

How much are

UNI’s funding rate at the time of writing was positive. In addition, it enjoyed a relatively positive standing in the past few days – a bullish signal. Besides, the rising mean coin age shows a wide accumulation of UNI tokens, a sign of a likely rally. 

Moreover, the development activity increased and could boost investor confidence. But investors should track BTC before making moves.