Key takeaways
After such a deep correction, is now the right time to buy UNI?
Yes, swing traders can buy UNI since the daily time frame showed a bullish structure, but $5.92 needs to be defended to keep bullish hopes alive.
Are technical indicators showing bullish strength?
Quite the contrary, they highlighted bearish dominance in lower time frames.
Uniswap (UNI) quickly recovered to $10.3 earlier this month, thanks to the UNIfication proposal and UNI buyback plans.
A report from AMBCrypto published earlier this month observed that, based on price action, it was likely that Uniswap token prices could fall back to $6.86 and $5.92.
Source: UNI/USDT on TradingView
This came true and at the time of writing, UNI was above the $5.92 support.
From a technical analysis perspective, the one-day timeframe continued to have a bullish bias. This was true since breaking the $8.6 high during the rally earlier this month.
Separately, the Uniswap Foundation highlighted the DeFi sector’s need for tax clarity and regulatory guidance in an article on X.
What future for UNI price trends?
Source: UNI/USDT on TradingView
The 4-hour chart shows conflicting technical indicator signals. The IMF was above 50, showing increased buying pressure and bullish momentum over the past few days.
In contrast, the CMF is well below -0.05, reflecting a significant flow of capital out of the market since November 20.
The H4 price structure was bearish, and had been for over a week. Retesting the $8.6 supply zone before this bearish slowdown meant sellers were in control.
Has the situation changed? Unlikely.
Recovery or another step down?
A Uniswap token price surpassing $6.55 would be the first sign of recovery. Such a move could allow traders to buy in shorter time frames.
Source: Coinalyse
On the other hand, a drop in UNI below $5.92 would signal a continued downtrend.
This scenario seemed more likely, based on the available evidence.
Additionally, Open Interest has remained stable over the past three days and the funding rate has dipped into negative territory at times.
This meant that long positions were being paid out by short position holders, indicating bearish sentiment. Spot CVD has increased over the past 48 hours, but not fast enough to reverse the previous week’s sales.
Disclaimer: The information presented does not constitute financial, investment, business or other advice and represents the opinion of the author only.
