Uniswap: Retest of support at $5.095 could have traders on the lookout for…

Disclaimer: The information presented does not constitute financial, investment, trading or other advice and represents the opinion of the author only.

  • UNI was in a price drop that could settle at $5.095
  • A break above $5.388 will invalidate the bearish forecast above

Uniswap [UNI] the prolonged downtrend since early December wiped out more than 20% of the asset’s value, falling from $6.55 to $5.01 on December 24.

UNI has been trading in a range since December 17 after being repeatedly rejected around the $5.388 level. At press time, UNI was trading at $5.228 but could drop if the sellers gain more leverage in the market.

Read Uniswap [UNI] price prediction 2023-24

UNI slides down: will the decline continue?

Source: Trading View

Additionally, the overall volume (OBV) steadily declined in early December, showing that UNI saw a decline in trading volume during the month. This undermined buying pressure, which limited an uptrend but allowed sellers to drive prices lower.

Therefore, if the selling pressure increases, UNI could drop and extend its pullback to settle at $5.095 or $5.014. Such a retest of these key support levels could serve as a target for short selling.

Although the Chaikin Money Flow (CMF) indicator moving towards the midpoint may suggest a trend reversal, historical trends do not support a convincing price reversal. A strong price reversal would likely occur if the CMF crossover coincides with a Relative Strength Index (RSI) crossover above or below the midpoint of 50.

Therefore, UNI might drop and retest the support at $5.095 or $5.014.

How many UNI can i get for $1?

However, an intraday candlestick closing above the bearish order block around $5.388 would disprove the above predictions. Such an uptrend would cause UNI to target the 200-period EMA (Exponential Moving Average) level at $5.630.

UNI has seen a drop in demand in the derivatives market

Source: CoinGlass

According to Coinglass, UNI’s open interest fell in August, rose slightly in October, and then plunged thereafter. As a result, UNI’s demand in the derivatives markets has risen from around $70m in August to around $40m at press time.

Such a trend can be considered a bearish outlook, as the demand for UNI has declined sharply over the past three months.

The Total Locked Value (TVL) of UNI across all channels also dropped sharply. According to Defillama, UNI’s TVL has risen from around $6 billion in August to $3 billion at press time. This represents a drop of 50% in three months.

As a result, the bearish outlook in the derivatives market could weigh on UNI’s price. However, a bullish BTC could rekindle the likelihood of an uptrend and invalidate the bearish forecast above.

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