The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- As of press time, the bulls had successfully defended Uniswap’s $4.95 support level.
- However, long-term investors should wait a while before making their next move.
uniswap [UNI] did not have a bullish bias at the time of writing this article. The bulls had bravely defended the $5 support level. It was also a significant level from a psychological perspective.
How many UNI can be obtained for $1?
Since the sellers had the upper hand, traders could look for opportunities to follow the broader trend. A move higher in the $5.3 region could offer one such opportunity.
A bearish H12 breakout impedes progress and buying pressure is also on the decline
The market structure on the 12-hour chart was firmly bearish for Uniswap. This proved that traders can look for short selling opportunities. The last 10 days have seen low trading volume, but On Balance Volume (OBV) showed that even then, sellers were the dominant force.
OBV had formed lower highs in the past three weeks. The Relative Strength Index (RSI) was also moving below the neutral 50 marks to show bearish conditions. However, with the RSI threatening to make higher highs with the price making lower highs since December 19, a bearish divergence could develop in the coming days.
This would reinforce the bearish pressure behind UNI. It was already trading below the 12-hour downside limit in the $5.26-$5.43 region (highlighted in red).
A retest of this area could offer a nice risk-reward shorting opportunity. Meanwhile, a session close above $5.43 would indicate that the bulls may push towards the $5.82-$5.88 area.
An 80.66x increase in cards if Uniswap reaches the market capitalization of Bitcoin?
Fibonacci retracement levels (yellow) showed that until the $6.6 level was broken, the trend of the higher time frame would remain bearish. However, this does not rule out minor moves up. Long-term buyers can wait for a move back above $6.6 before testing the market once more.
Median coin age and MVRV ratio are affected to highlight the strength of sellers
Data from Santiment showed that Uniswap’s network growth was muted over the holiday season. However, it remained above the growth observed in October. The drop in the 30-day market value to realized value (MVRV) ratio meant shorter-term holders profited at the $6.3 mark. The asset was undervalued, according to the MVRV metric, but does not guarantee a buy signal by itself.
The coin’s median age of 90 days also plunged during the selloff in early December. This described a burst of token movement between addresses and could be due to seller activity. In recent days, although the metric has risen, it did not show a consistent upward trend at press time. Accumulation in the next week or two could precede a price rally.