Uniswap: UNI shows the possibility of a bearish scenario
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Disclaimer: The following analysis is the sole opinion of the writer and should not be considered investment advice.
Uniswap looks bearish
- Uniswap forms a bearish reversal pattern
- 4-hour session closes below support signaling buyers
Uniswap has performed well in the market in recent weeks. It is up nearly 26%, measured from the low of late September to the high of the previous day.
In doing so, it formed a bearish reversal pattern, maintaining bullish momentum. This may change in the coming days.
UNI price prediction for 2022
Bitcoin has failed to rise above $20.4k again. If BTC falls below $19k, it could accelerate altcoin losses across the market. There are two critical levels that short-term Uniswap investors will keep an eye on.
UNI Price chart rising wedge detected
On the 4-hour chart, a rising wedge (white) has been detected. For the past few days, UNI has been trying to hold the $6.75 support.
However, at the time of this writing, it seems fate has slipped. The lower trendline support of the wedge and the horizontal support at $6.75 could be broken in the next few hours.
The RSI stands at 48.46 at press time. If it dips below 45 in the next few hours, the sign will be a move in favor of sellers. Stochastic RSI is also in the oversold zone.
In the event that $6.75 is lost as support, a bearish scenario could develop if the price falls further below the $6.47 level. This will change the 4-hour structure to a discount. The marked zone around $6.6 can act as a resistance and facilitate a drop of UNI far south to $6-$6.2.
On the other hand, $6.5-$6.6 is a significant level on the lower timeframes. If Bitcoin can defend the $19k area in the next few hours and start to reverse, UNI could also see a rally from $6.6.
Neutral Funding Uniswap interest rates
The Coinglass Long/Short ratio presents a slight edge to the sellers in the futures market. A look at the funding rate page shows that Uniswap has increased in price over the last 24 hours because it has a positive funding rate.
However, this reality has changed in the last few hours, as lower time frame market participants have changed their bearish bias.
A move below $6.6 could trigger a drop to $6.2, especially if Bitcoin continues to fall.
A 4-hour session close below $6.47 will change the structure to bearish. Traders can look for short buy entries near $6.5-$6.6. Alternatively, a rise above $7 and its subsequent retest of support could present a buying opportunity.
Oct 08, 2022