- Uniwap price dropped 7% in two days after finding resistance near $7.50.
- UNI could be in the beginning stages of a 20% decline targeting $5.20.
- Invalidation of the bearish thesis would arrive from a breach above $7.30.
Uniswap price shows a sudden change of market behavior, likely leading to a strong move south. Traders should race themselves and consider how to manage their risk while engaging in an unconfirmed downtrend.
Uniswap price hints at a bearish overthrow
Uniswap price is down by 7% in the last two days. The downswing comes after a second failed attempt to cross over the $7.50 resistance zone. This level has been a significant barrier for UNI in the past, and failure to break above it again suggests a lack of buying pressure at higher levels.
Uniswap price is currently auctioned at $6.75. The bears have produced a surge, reconquering the 8-day exponential (EMA) and 21-day simple moving averages (SMA) in less than 24 hours. The breach is a strong signal that a true market reversal is on the horizon.
The Relative Strength Index (RSI) is an indicator used to gauge the underlying strength of market participants by comparing and contrasting previous swing points. On February 4, the RSI showed a spike to 65 when the UNI price settled the daily close at $7.20. The recent swing point at $7.30 on February 20 only took the RSI to the 60 level. This is known as a bearish divergence and is an ideal spot for bears to apply pressure.
The recent price action and RSI signals suggest that UNI may experience further downside pressure in the short term. Uniswap’s failure to close above the range high will likely lead to a reversion to the other side of the range near $6.20. If the $6.20 support zone does not hold, the next expected level of the supply zone will be near the $5.20 area, resulting in a 20% decline from Uniswap’s current price.
UNI/USDT 1-day chart
A breach above the recent divergent high at $7.30 would be necessary to invalidate the bearish thesis. If this level is breached, Uniswap is expected to rally toward $10, which would result in a 46% increase from UNI’s current market value.