The Uniswap Token (UNI) price has been rejected by an important resistance area at $4.35 and dropped sharply after.
Uniswap Token is expected to continue dropping toward support levels before moving upwards again.
UNI Drops After Rejection
The UNI price has been moving upwards since reaching a low of $1.75 on Nov. 5. On Nov. 15, UNI reached a high of $4.24, which was very close to the primary resistance area of $4.35. This resistance is also the 0.382 Fib retracement of the entire previous downward move.
Since then, UNI has made three unsuccessful attempts at breaking out and is currently falling back after being rejected on Dec. 19.
The closest support area is found at $2.80 — the 0.618 Fib retracement level of the entire upward move.
Technical indicators are neutral but leaning on turning bearish since the RSI is in the process of decreasing below 50 and the Stochastic oscillator once again has a bearish slope.
A closer look at the movement reveals that UNI had been following an ascending support line since Dec. 12. However, the rejection caused UNI to break down from this line amid a significant bearish candlestick.
However, there is another support found at $3.11. The area is the 0.5 Fib retracement level and coincides with a descending resistance line (dashed) that UNI broke out above prior.
Therefore, it’s possible that UNI reverses once it reaches this level, but there are no bullish reversal signs yet.
Cryptocurrency trader @ColdBloodShill outlined a UNI/BTC chart, stating that a breakout from the current wedge could trigger a very rapid price increase.
The wedge is normally considered a bullish reversal pattern and there is a bullish divergence in the RSI to suggest that a breakout will occur. Furthermore, UNI is trading close to the 15,100 satoshi support area — the 0.786 Fib retracement of the entire upward move.
Despite this, the previous breakout for UNI could not be sustained and only served to validate the 18,500 satoshi resistance area. Therefore, until UNI manages to reclaim the 1,850 satoshi resistance area, the trend is considered bearish.
The UNI price is expected to reverse its bearish trend near the support areas outlined at $2.80 and $3.10. At the current time, we cannot state with certainty whether UNI will break out above the $4.35 area after.
While UNI/BTC is expected to break out from its descending wedge, we cannot yet determine if the long-term trend is bullish.
Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.
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Source: Be In Crypto