- UniSwap looks forward to a descending wedge pattern breakout to $5.00.
- UNI/USD is holding above the 21 SMA while the upside is capped under the 50 SMA.
UniSwap has been on a downward roll since September after its bullish scenario was cut short by resistance at $5.60. The price has continued to narrow within the confines of a descending wedge pattern. This pattern forms whenever the value of an asset has been falling over a period of time. Breakouts can either be up or down, however, falling wedge patterns tend to signal an incoming bullish breakout. Note that to properly trade this pattern, the trader must employ other technical indicators.
At the time of writing, UNI is trading at $4.28 after suffering another rejection at the descending trendline as well as the 50 Simple Moving Average (SMA) in the hourly range. The price is immediately supported by the 21 SMA.
UNI/USD 1-hour chart
Looking at the Relative Strength Index (RSI), UniSwap is likely to continue exploring the levels towards $4.00. It is essential that support in the range between $4.2 and $4.3 is defended at all costs. According to IntoTheBlock, this is the strongest support zone. Here, 9,600 addresses bought 20.4 million UNI. If this level zone is shattered, UNI will extend the bearish leg to $3.50.
On the other hand, a bounce from the support will have the potential to push the price out of the wedge. A breakout from the wedge will place UNI on the path to $5.00. Closing above the 50 SMA is particularly vital to the bullish case because it will add credence to the breakout. Traders must keep in mind potential resistance zones at $4.60 and $4.80, respectively.
UniSwap Intraday Levels
Spot rate: $4.30
Percentage change: -1.82%
Relative change: -0.08
Trend: Short term bearish bias