Uniswap Price Forecast: Defi Toke UNI Uptrend-Threatened By Double-Top Pattern
- Uniswap price breakout from $14 to levels above $20 is under grave danger of stalling.
- A double-top pattern is higher bearish and could lead to a massive correction below $20.
- The transaction history model highlights robust support around $19.5, likely absorb the potential overhead pressure.
Uniswap upheld a recovery following support at $14. This buyer congestion zone ensured that losses did not stretch to $10. Moreover, it allowed bulls to take control, as investors speculate on the ultimate rise above $20. The recovery occurred in tandem with a generally rising cryptocurrency market. Bitcoin traded above $40,000 in July and brushed shoulders with $42,000 on Sunday.
The decentralized finance (DeFi) token UNI is trading at $22.5. The upswing above $20 touched $23, but bulls ran out of steam to sustain the trend toward 30. Immediate support at $22 has the potential to absorb overhead pressure from wreaking havoc on the gains accrued since July 20.
Uniswap Price Could Trim Gains If Key Technical Pattern Matures
UNI seems to have formed a double-top pattern on the four-hour chart after failing to break the resistance at $23. This is a highly bearish technical reversal pattern that comes into the picture after an asset hits a high price point a couple of times and fails to sail through. Note that there is usually a moderate price drop between the peaks (July's slide to $14).
The double-top pattern is confirmed in technical analysis when the asset dives' price under a support level that is equal to the low between the preceding two highs. Identification of a crucial support level helps to avoid failed double-top patterns. Therefore, traders need to watch out for another slip under $22. Moreover, a four-hour close below $20 will validate the correction that may trim gains toward $14.
UNI/USD four-hour chart
The Moving Average Convergence Divergence (MACD) indicator is about to flash a sell signal in the exact four-hour timeframe. This call to sell will occur as the 12-day EMA crosses below the 26-day EMA and will reinforce the bearish narrative. As the MACD drops toward the mean line, the odds for a price correction appreciably increase.
What May Cancel Uniswap's Bearish Picture
IntoTheBlock's IOMAP model shines a light on robust support around $19.5. The metric confirms that 5,400 addresses previously bought 138 million UNI. Firm support such as this could absorb most of the selling pressure, allowing bulls to focus on pulling the price higher.
Uniswap IOMAP On-chain Metric
The absence of intense seller congestion zones on the upside shows that Uniswap has a smooth recovery trajectory. A break above $23 will invalidate the double-top pattern, boosting UNI significantly above $25. Meanwhile, bulls are looking forward to gaining ground above $30.