- Uniswap breaks down under an ascending parallel channel following a rejection at $7.
- A reduction in network growth is a crucial bearish signal for the token and the network's adoption.
Uniswap continues to be one of the best-performing decentralized finance (DeFi) tokens in the market. Over the last three months, UNI has recovered by nearly 300% from $1.75 to a new 2021 high of $6.9. However, a reversal seems imminent at the time of writing and is likely to extend to $4.5.
Uniswap rejected from $7 as technicals turn bearish
The flagship cryptocurrency hit $40,000 on Thursday for the first time in history. The entire cryptocurrency market shot upwards in tandem with BTC. Uniswap made a final leap towards its all-time high at $8.75 but stalled short of $7.
At the time of writing, UNI/USD is teetering at $5.58 after the rejection that has proved significant enough to shatter support expected at the ascending parallel channel's lower boundary. For now, all eyes are on the 50 Simple Moving Average on the 4-hour chart to provide the much-needed support.
However, if push comes to shove, Uniswap is poised for an extended downfall towards the 100 SMA. The Relative Strength Index reinforces the breakdown as it spirals quickly to the oversold region.
UNI/USD 4-hour chart
The TD Sequential indicator has recently presented a sell signal on the 123-hour chart. The bearish outlook manifested in a green nine candlestick. Its validation saw massive sell orders triggered and may continue printing one to four bearish candlesticks on the day.
UNI/USD 12-hour chart
According to the "Daily Active Addresses" model by IntoTheBlock, new addresses joining the DeFi network have taken a turn to the south. This could explain the overhead pressure on UNI at the time of writing.
Uniswap new addresses chart
A negative network growth is usually a critical bearish signal for the token's price and the project's future. The number of new addresses that have joined the network in the last 24 hours stands at approximately 1,800 compared to 2,300 on December 31.
It is worth mentioning that the pessimistic outlook will be invalidated if the 100 SMA support remains intact. Buyers are likely to take advantage of the stability at this level to join the market in anticipation of new all-time highs.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high
Bitcoin and Ethereum are approaching their key support levels, and a sustained close below these marks could lead to further declines.
TON set to launch synthetic Bitcoin to boost its DeFi solutions
TON revealed its plan on Thursday to launch a synthetic Bitcoin token on its blockchain, allowing users to trade, stake, and earn yield using BTC. Following the announcement, TON is down over 3%.
Maker Price Forecast: MKR could stage 40% rally
MakerDAO is up 2% on Thursday and could be set for a 40% rise in the coming weeks if it successfully maintains an extended move above the descending trendline of a falling wedge. On-chain data also supports the bullish outlook after a four-month-long decline.
USDT market cap crosses $120 billion as stablecoins continue their uptrend
The stablecoin market cap continued its uptrend in October, characterized by USDT reaching a $120 billion market cap, according to a CCData report on Thursday. This indicates that investors are preparing liquidity to fuel more demand.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.