Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.
- Uniswap shifted its market structure lower in the recent fall
- A bearish order block could still oppose recovery attempts
Uniswap experienced sharp downward price moves in August and early November. After the August drop, there is some evidence to suggest that buyers have been hoarding the coin. Yet UNI did not register a strong recovery. The $7.5 mark stopped the bulls in their tracks.
Read Uniswap’s price prediction in 2023-24
Should Bitcoin succeed in gaining bullish momentum, Uniswap could be a coin that quickly rallies. However, until market sentiment changed, further lows were likely for UNI. From a technical standpoint, the $5.8 level could provide a short selling opportunity.
Bearish market structure and block orders to beat at $5.83
On November 8-9, Uniswap began pulling back from the $7.51 level that the bulls had worked so hard to reach since September. This pullback quickly turned into a breakout of the bearish pattern as selling pressure intensified.
A set of Fibonacci retracement levels (yellow) was established based on this UNI decline. It showed the 38.2% level sitting at $5.89, which was close to the horizontal significance level at $5.83. For much of November, the bulls attempted to break above $5.8 and $6.2. And they succeeded briefly, but the selling pressure increased again to force a drop from the $6.25 mark.
Last week, a bearish order block formed at $5.89. Highlighted by the red box, it converged with the horizontal levels and the market structure also favored short positions. The RSI was also below the neutral 50 mark to show bearish dominance.
Still, the OBV has made a series of lows since September. Despite November’s sharp decline, OBV did not register a huge selling volume. Buyers were steady despite the price trend, and it showed that when market sentiment shifted into bullish favor, Uniswap could be one of the fastest coins to rally.
Average Coin Age Is On The Rise Again While Development Activity Has Also Soared
Long-term investors can take heart from the fact that there has been a lot of development activity over the past few months. It has been steadily increasing since June. The network growth metric also saw an increase two weeks ago, suggesting that new users were in the market. This could lead to an increase in demand for UNI tokens. However, this metric has since declined.
The measure of average coin age (180 days) also saw a sharp decline at the start of the month, but rose again. This suggested that the age of the coins was on the rise after the recent selloff and could signal an accumulation.