How high can Uniswap rally before UNI bears hit back? Assessing…

Key Takeaways

After such a deep correction, is this the right time to buy UNI?

Yes, swing traders can buy UNI since the daily timeframe showed a bullish structure, but the $5.92 must be defended to keep bullish hopes alive.

Do the technical indicators show bullish strength?

Quite the opposite, they highlighted bearish dominance in the lower timeframes.

Uniswap [UNI] rallied swiftly to reach $10.3 earlier this month, on the back of the UNIfication proposal and UNI buyback plans.

An AMBCrypto report earlier this month observed that, based on the price action, it was likely that Uniswap token prices could retrace to $6.86 and $5.92.

Source: UNI/USDT on TradingView

This has come true, and at the time of writing, UNI was hovering above the $5.92 support.

From a technical analysis perspective, the 1-day timeframe continued to have a bullish bias. This was true since the breach of the swing high at $8.6 during the rally earlier this month.

In other news, the Uniswap Foundation called for the DeFi sector’s need for tax clarity and regulatory guidance in a post on X.

What next for UNI price trends?

Source: UNI/USDT on TradingView

The 4-hour chart showed conflicting technical indicator signals. The MFI was above 50 to show increased buying pressure and upward momentum over the past few days.

In contrast, the CMF has been well below -0.05 to showcase sizeable capital flow out of the market since the 20th of November.

The H4 price structure was bearish, and has been this way for more than a week. The retest of the $8.6 supply zone before this bearish downturn meant that the sellers were in control.

Has the situation changed? Not likely.

Recovery or another leg down?

A Uniswap token price move past $6.55 would be the first sign of recovery. Such a move could allow lower timeframe traders to buy.

Source: Coinalyze

On the other hand, a UNI drop below $5.92 would signal continued bearishness.

That scenario appeared more likely, based on the evidence at hand.

Moreover, the Open Interest has been flat over the past three days, and the funding rate has occasionally dipped into negative territory.

This meant long positions were paid by short position holders, and indicated bearish sentiment. The spot CVD was rising over the past 48 hours, but not fast enough to undo the previous week’s selling.

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