Uniswap (UNI) is on the verge of a potential breakout as it trades within an ascending triangle pattern. This technical formation suggests that UNI could be gearing up for a significant price increase. Let’s explore what this pattern means, how technical indicators are aligning, and what on-chain data tells us about Uniswap’s future.
Uniswap’s price has been consolidating in an ascending triangle pattern since early August. This pattern is formed by connecting two higher lows with an upward-sloping trendline and two roughly equal highs with a horizontal resistance line. This setup often signals that the price is likely to break out in the direction of the prevailing trend—suggesting a bullish move in this case.
Currently, UNI is trading around $6.86 within this ascending triangle. For a breakout to be confirmed, the price needs to close above the resistance level of $7.06. If this happens, the expected target price could be around $9.38, based on the pattern’s height. This potential target represents a substantial gain from the current levels.
Technical indicators are also supporting a positive outlook for Uniswap. The Relative Strength Index (RSI) and the Awesome Oscillator (AO) are both above their neutral thresholds of 50 and zero, respectively. This indicates that momentum is strong and favors further upward movement.
Investors should watch the $8.19 resistance level closely. If UNI reaches this point, it might face some selling pressure as traders take profits. However, given the current bullish indicators, any resistance at this level could be temporary.
On-chain metrics provide additional insights into Uniswap’s potential. Santiment’s Exchange Flow Balance, which measures the net movement of UNI tokens into and out of exchanges, has shown a notable shift. Recently, the balance moved from a positive to a negative value, indicating that more UNI tokens are being withdrawn from exchanges than deposited. This shift suggests a decrease in selling pressure and an increase in accumulation by investors.
For example, from September 4 to September 5, the Exchange Flow Balance dropped significantly from 12,250 to -1.85 million. A similar decline was observed from Sunday to Monday, with the balance moving from 7,015 to -1.05 million. This negative shift aligns with a bullish sentiment among investors.
Furthermore, the Uniswap Supply on Exchanges has decreased by 4.7%, signaling that investors are moving their tokens from exchanges to cold storage. This behavior reflects increased confidence in Uniswap and supports the bullish outlook.
While the bullish scenario appears promising, there are risks to consider. If Uniswap’s price breaks below the upward trendline of the triangle, it could invalidate the bullish thesis. A daily close below $5.54 would shift the outlook to bearish and could lead to a significant decline, potentially dropping to $4.70, a level seen earlier in August.
Uniswap is at a critical juncture. The ascending triangle pattern, along with positive technical indicators and on-chain data, suggests that UNI could experience a notable rally if it breaks above the $7.06 resistance level. The potential target price of $9.38 represents a significant upside from current levels.
However, investors should remain vigilant for any signs of a breakdown below the triangle’s support level. Such a move could turn the current bullish outlook into a bearish one. Monitoring these key technical and on-chain indicators will be crucial for navigating Uniswap’s price action in the coming weeks.
A finance graduate, Maheen Hernandez has been drawn to cryptocurrencies ever since Bitcoin first emerged in 2009. Nearly a decade later, Maheen is actively working to spread awareness about cryptocurrencies as well as their impact on the traditional currencies. Appreciate the work? Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5
Get the latest Crypto & Blockchain News in your inbox.
Join Now