fxs_header_sponsor_anchor

Uniswap price could crash 30% as UNI forms a bearish swing failure pattern

  • Uniswap price attempted to flip the $7.22 hurdle but faced a sell-off, resulting in a swing failure pattern.
  • This development could result in a 20% crash to $5.74, and potentially lower should the bears continue to rampage.
  • Invalidation of this bearish outlook will occur if UNI can flip the demand zone at $7.77 into a support floor. 

Uniswap price shows a steady uptrend with higher highs and higher lows. While this outlook alone might instill confidence in a layman investor, a closer look reveals weakness. Market participants need to be cautious as a trend reversal could be brewing.

Also read: A crypto beginner’s guide to Nonfarm Payrolls and its effects on BTC

Uniswap price ready to take a U-turn

Uniswap price was rangebound between $4.95 and $6.34 levels from November 2022 to January 2023. From January 13, UNI kick-started its slow but steady uptrend that produced four higher highs and three higher lows. As a result, the altcoin inflated by 24% in under three weeks.

The most recent spike in buying pressure occurred on February 2, below the $7.22 hurdle. This development pushed Uniswap price up by 6.84%, but the twelve-hour candlestick closed below the aforementioned level, creating a Swing Failure Pattern (SFP). Such a move is a sign of manipulation to cull the early shorters or bears by pushing the asset above a crucial resistance level. 

In particular, this SFP is a bearish one and is proceeded by a trend reversal. Two other bearish SFPs can be seen on November 15 and December 2, 2022, where Uniswap price attempted to breach a strong resistance level at $6.34 but failed and produced a twelve-hour candlestick close below it.

Both these times, UNI dropped 20% and set up equal lows at $4.95. Now that Uniswap price has produced another bearish SFP, a correction to the immediate support level at $6.35 seems likely. Adding credence to this bearish outlook is the fact that this SFP is occurring inside a daily supply zone, extending from $6.81 to $7.77.

If the $6.35 structure breaks, the next crucial level is $5.74, which is roughly 20% away from the current position of UNI at $7.10. In a dire case, Uniswap price could sweep the equal lows at $4.95, signaling a 30% crash.

UNI/USDT 1-day chart

While the bearish outlook has sufficient backing, investors need to watch the nonfarm payroll announcement today closely. If this macro-event is positive, it could potentially trigger a rise in buying pressure for Bitcoin price and the altcoins as an extension, including Uniswap price. 

In such a case, if Uniswap price flips the demand zone’s upper limit at $7.77 into a support floor, it would invalidate the bearish thesis and potentially trigger a run-up to $7.96.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.