Key Takeaways:
- Uniswap is eyeing a jump of nearly 110% if it confirms a bullish technical pattern.
- MACD for UNI shows strengthening bearish momentum.
NEW DELHI (CoinChapter.com) — Uniswap (UNI) market size could double if UNI confirms a classic bullish pattern called the “inverse head and shoulders (IH&S).”
In detail, the pattern appears as three inverse valleys forms below a neckline resistance, as shown in the chart below.
Traders consider the IH&S pattern a reliable trend reversal indicator. The price target for a breakout below the neckline equals the distance between the head and the neckline. As per the rules of technical analysis, the pattern predicts a surge if the cryptocurrency’s prices conquer the neckline.
Also Read: Uniswap surpasses $1T in lifetime volume as DEX beat CEX in on-chain flows.
UNI prices could jump nearly 110% to reach $10.6, recovering some of 2022’s losses.
However, UNI prices face stiff resistance near $6, which has resisted Uniswap’s rally multiple times since May. The resistance level coincides with the pattern’s neckline.
MACD Indicating Strengthening Bearish Momentum For UNI
UNI prices have been trending downward since Jun 26, after the altcoin’s 50-day exponential moving average (50-day EMA, purple wave) rebuffed Uniswap’s uptrend. Moreover, the token moved below its 20-day EMA (red wave) on Thursday after falling 6.6% between intraday high ($5.14) and low ($4.8) levels.
Meanwhile, Uniswap’s momentum oscillator MACD is showing signs of strengthening downside momentum.
Positive bars on the MACD histogram are contracting, indicating that the MACD line (difference between 12-day and 26-day EMA) is moving towards the MACD signal line (9-day EMA of MACD).
Additionally, once the MACD line crosses below its signal line, it will chart a technical pattern called the bearish crossover. Traders consider the pattern a sell signal.
A sell-off could send UNI prices to test immediate support near $4.7, which previously supported Uniswap price action between May 12 and Jun 10. If immediate support fails, UNI prices could fall to support near $4.
Finally, a marketwide sell-off might see Uniswap fall 25% from current levels to test support near $3.6.
Also Read: What is margin call and how does it crash crypto markets?
Conversely, if bulls move to push prices above the IH&S neckline, UNI would first need to conquer the 50-day EMA (purple wave) resistance near $5.4. Moreover, moving above the 50-day EMA would provide Uniswap the momentum to challenge resistance near $6.2.
A sustained uptrend might result in the DeFi token’s prices jumping 42.3% to challenge resistance from the token’s 100-day EMA (blue wave) near $6.8.
At the time of writing, UNI was trading at $4.73, down 7.4% on the day.
