Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion

• The extended drop below $5 saw UNI shed over 20% in value.
• The Open Interest rates remained low, with UNI below $5. 

Since 18 August, Uniswap [UNI] has failed to close above $5 on the daily chart, giving the leeway for further depreciation. However, the drop hasn’t exceeded $4.5 as bulls turned it to immediate support.  

Is your portfolio green? Check out the UNI Profit Calculator

In the meantime, Bitcoin [BTC] saw a price rejection at $26.8k, making it a new resistance level. If BTC fails to clear the new resistance in the next few days, UNI’s struggles below $5 could be extended. 

Can bulls reclaim $4.94?

The Relative Strength Index (RSI) was negative, denoting elevated selling pressure. In addition, the Chaikin Money Flow (CMF) attempted a northbound movement but was below the threshold, indicating little capital inflows. 

The above readings illustrated sellers’ conviction in the market. The drop from mid-August ($6.3) to below $5 has depreciated UNI by over 20%. But sellers have had difficulty cracking the $4.5 immediate support while bulls could not cross $4.94, the last hurdle to reclaim $5. 

Thus, the bearish market structure makes the asset ripe for shorting upon a retest of $4.94, with a take-profit target of $4.5. 

But a daily candlestick close above $5.00 will invalidate the bearish bias. Such a move will set UNI to aim at $5.425 or $5.80. 

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Author: Benjamin Njiri

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