CRYPTOS | Dec 06, 09:48 GMT
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Uniswap is striding on an uneven ground after a recent rejection at $3.8. Before, UNI had embraced support at $3.45, hence the short-lived recovery. Meanwhile, a correction that could potentially beco
me massive is underway.
Uniswap is on the cusp of a symmetrical triangle breakdown
The decentralized finance token is trading within the confines of a symmetrical triangle. The pattern forms when the price creates a series of lower highs and another series of higher lows. Trendlines are used to connect the peaks and lows.
A breakout can occur either above or below the triangle, but it happens before the trendlines converge. At the time of writing, UNI is trading at $3.5. The immediate upside is capped by the 50 Simple Moving Average and the 100 SMA.
The token is about to dive under the lower trendline, which might result in a massive downswing to $0.25. Tentative support at the 200 SMA is likely to absorb some of the selling pressure, preventing Uniswap from spiraling sharply.
On the flip side, closing the day within the triangle might invalidate the bearish narrative. Moreover, a reversal above the hurdle created by the 50 SMA and 100 SMA would call for more buy orders. If the demand for Uniswap surges, a breakout above the triangle will culminate in a massive upswing to price levels beyond $5.