Uniswap (UNI), one of the leading decentralized exchange tokens in the crypto market, has seen a notable price recovery over the past 24 hours. After weeks of bearish sentiment, UNI jumped by 20%, climbing from around $4.55 to briefly touch the $5.5 mark. While this surge brought some optimism to the market, technical indicators and broader trends suggest that caution may still be warranted.

The rally came at a time of relief in global markets, largely influenced by political developments. Former President Donald Trump recently declared a 90-day suspension of tariffs for all countries except China, a move that likely aimed to ease the pressure from a sell-off in the U.S. Treasury market. As global investors reacted positively, traditional stock markets experienced a rebound—and so did cryptocurrencies. Bitcoin (BTC), the market leader, surged 5% within an hour of the news, pushing briefly above the $80,000 mark. This overall bullish sentiment helped lift UNI as well. However, for Uniswap, this may be more of a short-term relief rally rather than the beginning of a new bull run.

Despite the rapid price increase, UNI now faces stiff resistance at the $5.5 level. This price point previously acted as a strong support, but after being broken in earlier trading sessions, it has flipped into resistance. So far, bulls have been unable to convincingly break past it, and without a clear breakout, traders are being advised to stay cautious. Historically, the inability to breach such key levels often precedes another downward move.

From a technical standpoint, the daily Relative Strength Index (RSI) has remained below the neutral 50 level since January, indicating ongoing bearish momentum. Even though the recent bounce pushed prices higher, it wasn’t enough to alter this broader trend. The On-Balance Volume (OBV), another crucial indicator, has shown resilience by holding above its March lows. This could be an early sign of accumulation, but on its own, it’s not enough to confirm a reversal in trend.

Looking closer at the 4-hour chart, UNI’s price action has been confined within a descending trendline over the past 10 days. The latest rally tested this trendline but failed to break through, reinforcing the idea that bullish momentum remains weak. Although the RSI on the 4-hour timeframe has moved above 50, suggesting some short-term strength, the broader picture still leans bearish. Interestingly, the OBV on this shorter timeframe has started forming slightly higher highs, which may indicate growing buyer interest—but again, follow-through is essential.

For traders, the most critical level right now is $5.5. A confirmed breakout above this resistance, followed by a retest that holds, could signal a shift in momentum and offer a potential long entry. However, if this level continues to reject upward moves, it might set the stage for another leg down. The immediate support to watch lies around $4.6. If UNI drops below this zone, it could trigger a bearish continuation with the next target around $4.0 or even $3.7, a level that acted as a significant floor in past cycles.

In terms of strategy, those looking to go long should wait for a clear break above $5.5, ideally supported by rising volume and bullish confirmation across indicators. Jumping in too early may expose traders to unnecessary risk, especially if the rejection at resistance turns into a broader correction. On the flip side, a move below $4.6 with strong selling pressure could offer an opportunity to short UNI, with a downside target at $3.7.

Risk management remains essential in this volatile market. Given the uncertain macroeconomic environment, heavily influenced by policy changes and global events, crypto assets like UNI are particularly susceptible to sharp swings. As such, any trade—long or short—should be backed by strict stop-loss settings and a clear entry/exit plan.

In summary, Uniswap’s recent price surge has brought some temporary relief, but the token remains in a long-term downtrend unless it can break and hold above the $5.5 resistance. While macroeconomic factors like the temporary pause in tariffs have boosted market confidence, UNI’s technical structure doesn’t yet support a bullish reversal. For now, traders should watch key levels closely, remain patient, and avoid making hasty decisions based on short-term price spikes.

Whether this bounce is the start of a larger trend or just another bull trap will become clear in the coming days. Until then, caution remains the name of the game.