Uniswap (UNI) price raised more than 10% after Uniswap Labs announced the launch of its own Layer-2, Unichain. This surge in price has driven the Relative Strength Index (RSI) to overbought levels, suggesting strong buying momentum.
The rapid increase has brought caution to the market, as overbought conditions may lead to a pullback. Key resistance and support levels will be critical in determining UNI’s next price movements.
UNI RSI Suggests Overbought Conditions
UNI’s RSI is currently at 80, up sharply from 58 in just a few hours after news about Unichain. This quick increase suggests strong buying momentum as investors reacted positively to the news.
RSI, or Relative Strength Index, measures the speed and change of price movements and is used to determine whether an asset is overbought or oversold. It ranges from 0 to 100, with values above 70 indicating overbought conditions and values below 30 signaling oversold conditions.
Read more: How To Buy Uniswap (UNI) and Everything You Need To Know
With an RSI of 80, UNI has entered an overbought stage, meaning that the recent price surge may have pushed the asset beyond its fair value in the short term. Overbought conditions often imply that a correction or pullback could be imminent as the buying frenzy cools off.
Investors should be cautious, as prices may become more volatile and susceptible to downward pressure if profit-taking begins. The current high RSI level indicates that UNI’s price rapid rally could soon face resistance, potentially leading to a short-term price correction.
