Uniswap price has been on a downtrend for roughly 300 days and the recent crash pushed it into an inflection point. Therefore, the reversal that occurs here could be the key to triggering a massive bull rally for the altcoin.
Early signs of a rally
Uniswap price has been on a steady downward movement since it set up a swing high at $45.08 on 3 May, 2021. The correction, at least for some time, was supported primarily by the $14.51 support level. This barrier held its own despite multiple retests over the months, but the recent crash, knocked UNI down by 54% in the last month or so.
Two significant events occurred here – liquidity run below the recent swing low at $9.53 and a dip into the demand zone, ranging from $7.31 to $9.69.
A liquidity run is a technique employed by market makers to engineer or fill their bids by pushing the asset to a place where stop-losses are generally placed. Such a run is often followed by a quick reversal of the price. Therefore, the recent dip below $9.53 indicates the market makers’ true intention, which is a bullish move.
Moreover, this correction coupled with the liquidity run has pushed Uniswap into a demand zone, ranging from $7.31 to $9.69, making the bullish outlook a high probability reversal scenario.
Therefore, the originating upswing is likely to propel Uniswap price by 75% to tag the immediate resistance barrier at $14.51. If buyers overcome this hurdle, a similar run-up is likely to kick-start, pushing UNI to retest $19.96, bringing the total ascent to 135%.
UNI/USD | Source: Tradingview
While technicals might seem highly bullish, the on-chain metrics are aligning with this scenario, serving as a tailwind. The on-chain volume provides an idea of the investors’ activity on the network. Interestingly, this index witnessed a recent spike pushing the volume from 217.4 million UNI to 323.4 million UNI. This 48% uptick creates a bullish divergence and also indicates that investors are interested in Uniswap at the current price levels.
On-chain Volume | Source: Santiment
From a long-term perspective, this bullish opportunity makes perfect sense. However, a breakdown of the support confluence, ranging from $7.31 to $9.69 will indicate that the bulls are unable or unwilling to support an uptrend. In such a case, Uniswap price will likely continue this downtrend to retest lower support levels.
Source: https://ambcrypto.com/uniswap-price-approaches-a-support-confluence-hinting-at-a-75-upswing/