Can Oversold RSI Uplift UNI Price from $6 Support level?

From Mid-June to August, the UNI/USDT token showed steady growth in response to an ascending trendline. This run-up surged the prices by nearly 200% as it reached and formed a local top at the $9.68-$9.74 mark. However, Amid the August third-week sell-off in the crypto market, the UNI price turned down from the $9.68 mark. The bearish reversal breached the support trendline on August 17th, positioning the Uniswap token for a prolonged correction.

Key Points from UNI analysis: 

• Losing 0.618 FIB support would indicate weakness in bullish commitment
• The downsloping 20-day EMA is on the verge of dropping below 50-and-100-day EMA, preparing a strong sell signal 
• The 24hr trading volume of Uniswap has increased by 11% to reach $175.6 Million.

Source- TradingView

The UNI price has plunged to the $6-5.9 support zone, registering a 38.8% loss within a fortnight. Moreover, this support level aligned with the 0.618 Fibonacci retracement level, projecting a high area of interest for uptrend continuation.

The UNI price is currently trading at the $6.13 mark, with a 0.49% intraday loss. Furthermore, the coin chart shows a long-tail rejection candle at $6 support, indicating the buyers are wrestling trend control from sellers.

If they succeed, the resulting rally may surpass the immediate resistance level of $6.64 and challenge the high supply zone at $7.45. This resistance level, crowded with 20-50-100-day EMAs, makes it a formidable barrier.

On the other hand, if the bearish cloud continues to influence the crypto market, the UNI price may lose $5.9 support, resulting in a price drop to 21.7%, where it could hit $4.674 support.

Technical Indicators 

MACD indicator: The MACD and signals slumped below the neutral line give additional confirmation of short-sellers. Moreover, the rising red bars in the histogram reflect steady selling in the market.

Relative Strength Index: the RSI slope on the verge of entering the oversold regions indicates the traders have overextended their selling activity. Thus, the oversold RSI may attract more buyers at a discount, triggering a short relief rally.

• Resistance Levels: $6.64 and $7.4
• Support Levels: $6 and $4.64