Disclaimer: The findings in the following analysis are the sole opinions of the author and should not be taken as investment advice.
At a time when most cryptocurrencies were making gains thanks to Bitcoin’s gradual recovery from late-July lows, the same could not be said for Uniswap. While the alt traded in an uptrend until mid-August, its trajectory soon slowed. This was evident by their monthly ROI which stood at 1.8%, the lowest among the top 10 cryptos.
On the chart, some bearish patterns explained heavy losses. While UNI’s short-term outlook remained unfavorable, attention can now be turned to crucial support that could stop the bleeding. At the time of writing, UNI was trading at $ 26.5, down nearly 12% in the past 24 hours.
4 hour Uniswap chart
While UNI started August on a positive note, a rising wedge setup, a double top formed at $ 30, and a descending triangle pattern triggered breakouts ranging from 8% to 13%. The latest drop was compounded by short sellers as UNI closed below its 4-hour 200 SMA for the first time in more than a month.
However, what was common to all of these pullbacks was the $ 24- $ 24.5 defensive zone. The aforementioned zone not only eased downward pressure from the market, but also served as the basis for minor rallies throughout August.
This area should also be closely monitored in the future. On the other hand, a prolonged sell-off would drag the price down to monthly lows of around $ 23.3
Meanwhile, UNI’s indicators did not fare too well. The MACD threatened to move below the midline – an event that triggered some additional selling in the market. The Awesome Oscillator grew in length below the midline as momentum rested on sellers.
Interestingly, the Relative Strength Index moved into the oversold zone and there was some chance for an immediate reversal. In such a case, UNI would have to close above $ 27.2 for steeper gains.
Since the sellers had full control of the UNI market, much comes down to the defensive region of $ 24- $ 24.5. The aforementioned area has undergone multiple reductions and the same can be expected in the upcoming sessions as well.
However, traders should avoid yearning for UNI in such a situation. A better option would be to take short positions in case UNI closes below the $ 24 mark.
This is a machine translation of our English version.
Your opinion is important to us!