Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the writer.
- UNI has been in a correctional facility and it could fall below $5,267.
- A break above the $5,417 resistance would invalidate the forecast.
uniswap [UNI] it has had two successful rallies since the November 2022 market crash, each reaching $6.5. However, the most recent rally phase only reached $5.5 before turning into a correction.
Read from Uniswap [UNI] price prediction 2023-24
At press time, UNI was trading at $5,323 and was threatening to dip below support at $5,267. Although such a move lower could provide short traders with additional gains, technical indicators (12-hour chart) and whale action urged caution.
Support at $5,267: Was a break below it likely?
In the second phase of UNI’s rally, the token reached $6.5 in early December 2022 after hitting a low of $5.0 in November 2022. It then followed a downtrend, forming a descending channel, before falling below this in a trading range.
UNI had been trading within the $4,967 to $5,417 range since mid-December and only broke above it on Jan 4, 2023, after a massive BTC rally on the same day. The patterned breakout allowed UNI to reach the 100-period EMA of $5,609 before a correction took place.
The RSI, CMF, and MFI indicators all pulled back from the upper ranges, suggesting that buying pressure was easing, buyers were losing significant leverage, and distribution was underway.
Therefore, UNI could turn lower, breaking the support at $5,267 and close at $5,130. The level could serve as a target for shorting.
However, the RSI has not yet dipped below the midpoint of the 50 mark, and the CMF has not yet dipped below the zero mark, which would give the bears more leverage. A rejection of these indicators at their midpoints would favor the bulls.
If the bulls gain traction and break above the resistance at $5.417, the previous bearish bias would be invalidated. Such a bounce would allow UNI bulls to target the 100-period EMA of $5,596.
The most dominant supplier of whales was behind the recent selling pressure.
According to Santiment, the dominant supplier category controlled 53% of the total supply and held between 10,000 and 100,000 UNI coins.
This dominant category was responsible for the recent selling pressure, while the next influential category (1K – 10K coins), with a 19.5% control, was piling up.
So, at press time, the dominant player was calling the shots in the market, and investors could follow suit to minimize risk.
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UNI Open Interest (OI) was unchanged as the price fell lower
According to Coinglass, the divergence between OI and the UNI price on January 2 was followed by the UNI price surge on January 4. UNI Binance Exchange open interest rates fell on Jan. 5 after a drop in UNI prices.
However, OI was unchanged on January 6, when UNI prices fell further. This means that the demand in the futures markets remained unchanged despite the price drop.
Although this could indicate a potential momentum reversal, investors should include RSI, CMF, and BTC movements for a clear and probable trend reversal before closing their positions.