- Uniswap runs into acute resistance at $38, cutting the mission to hit levels beyond $40.
- The RSI on the four-hour chart reinforces the bearish outlook.
- UNI's transaction history reveals minor to no resistance, hence the possibility for a breakout.
Uniswap broke out alongside Binance Coin (BNB) and Ripple (XRP) to stage massive gains from the crucial support established at $28. The upswing remained steadfast until UNI hit a seller congestion at $38. At the time of writing, UNI exchanges hands at $35 amid a strengthening bearish narrative.
Uniswap Bulls Aim for Higher Support
The decentralized finance (Defi) token's significant uptrend was recently rejected at around $38. The barrier at this level has paved the way for sellers to rush into the market, perhaps for revenge. In the meantime, Uniswap dodders at $35 amid the hunt for higher support.
A comprehensive look at the Relative Strength Index (RSI) shows that the bearish narrative is strengthening from a technical perspective. The trend strength indicator is about to exit the overbought region, a situation that could trigger extensive losses.
Note that the region between $34 and $35 is a crucial buyer congestion zone. Closing the day above this area would bring back market stability. On the other hand, the bearish leg may extend if Uniswap closes the day under the intermediate support zone. On the downside, support has been established at $32, $30 and the primary anchor at $28.
UNI/USD Four-Hour Chart
Santiment shows that network growth has declined significantly over the last 30 days. The number of addresses joining the protocol topped out at 3,234 on March 23 but has dropped to 2,257 at the time of writing, representing a 30.2% slump.
This on-chain metric tracks all the new addresses joining the network and helps gauge the project's future regarding adoption and price action. A low or declining network growth is a bearish signal. The drop in the addresses affects the regular inflow and outflow of tokens on the network.
Uniswap Network Growth Chart
Looking at the Other Side of the Picture
It is worth noting that according to the IOMAP on-chain model by IntoTheBlock, Uniswap faces the slightest resistance toward $40. Therefore, the Defi token only needs a little push to stop the ongoing correction and embark on barrier-breaking exercise.
Uniswap IOMAP Model
On the flip side, substantial support has been accorded to Uniswap as observed by the model. The most robust seller congestion zone runs from 30.2 to $31.2. Here, around 12,900 addresses previously bought nearly 35.6 million UNI. If this support remains unshaken, Uniswap bulls are likely to focus on reclaiming the position above $38.