Uniswap Price Analysis: UNI could be near a significant decline

Uniswap headed to greener pastures today after a significant correction.
Since the February low, volume has not been complimentary to the recent uptrend.
Relative Strength Index (RSI) shows declining momentum.

Uniswap price is spiking, putting UNI in the top-ten performing cryptocurrencies today with a 13% gain. Moreover, the SuperTrend indicator has registered a buy signal. These are bullish developments, but they could be just background noise to a larger bearish pattern unfolding.

Uniswap price advance today could be a fake-out

Uniswap has been a highlight in the cryptocurrency space in 2021 after climbing almost 600%. The price action during this March decline has been corrective, but the volume trend since the February low has been declining, showing a lack of commitment. Even with today’s massive gain, the daily volume is running at a third of the 50-day simple moving average (SMA).

Standing front and center on the charts is a developing ascending wedge. It could just be a correction in a dominant uptrend, or conversely, it could be an alert that a major top is about to be printed. If it is an ascending wedge and based on a rough pattern projection, Uniswap price should briefly make a new high around $36.53 before reverting downwards.

Alternatively, Uniswap price could continue to drift higher, making marginal new highs until mid-April when the pattern reaches its apex, which coincides with the 1.382 extension level of the February crash at $38.65.

As drawn on the chart below, initial support is at the lower trendline at $31.63, and if it fails to entice buyers, UNI could collapse to the 50-day SMA, which would be around $26.20. The next significant support does not emerge until the February 23 low at $18.20.

UNI/USD daily chart

The chart’s bias is tilted to the downside. Still, if the wedge does resolve to the upside, the potential gains will be limited to a test of the 1.618 Fibonacci extension at $42.15, representing a 24% gain from the current price.

The reward exceeds the risk in the short-term, but the risk is much more significant from a macro perspective.

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