Analysis

Uniswap (UNI) is creating a bullish pattern after an 83% decline

Uniswap (UNI) broke below long-term support on Jan. 19 but has shown some bullish signs within a bullish pattern.

UNI is 83% below ATH

UNI has been down since May 1st when it just hit an all-time high of $45. Between May and December, it bounced off the $15 horizontal zone and attempted to start an upward move.

However, all was unsuccessful, and UNI broke under it on January 19, 2022 (red icon).

So far, it has hit a low of $7.51 on Feb. 22, down 83% from the all-time high.

The next support zone is $5. Previously, this level has not been reached since January 2021.

UNI/USDT 2-day chart | Source: TradingView

UNI creates a bullish pattern

The daily chart is more bullish as it shows UNI trading inside a descending wedge. The descending wedge is considered a bullish pattern, meaning that a break above it would be the most likely scenario.

Furthermore, both the MACD and the RSI produced very clear bullish divergences (green line). Such divergences often herald a bullish trend reversal. Therefore, combined with the wedge, this suggests that a UNI breakout is the most likely scenario.

In this case, the next resistance is at $19.50. This is the 0.5 Fib retracement resistance and horizontal resistance area.

UNI/USDT daily chart | Source: TradingView

Count waves

Trader @TheTradingHubb claims that UNI is locked in a corrective pattern, meaning a long-term uptrend is likely thereafter.

Source: Twitter

Possibly the move down from the all-time high is an ABC correction, where wave A:C has a ratio close to 1:0.618. The number of partial waves is plotted in black.

Wave C has evolved into a closing diagonal, recognizable by the shape of a descending wedge. Such patterns are usually followed by a strong breakout and an upward move.

Therefore, it supports indicators and price action from the daily time frame.

UNI/USDT daily chart | Source: TradingView

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions

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Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.