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UNI Price Moves Above $10 as Uniswap Announces v4 and $41 Million in Fiat Holdings

Published May 28, 2024 8:23 AM
Valdrin Tahiri
Published May 28, 2024 8:23 AM

Key Takeaways

  • The UNI price trades in a long-term range between $7.20 and $14.50.
  • UNI broke out from a diagonal resistance area but still trades under a horizontal one.
  • Will UNI break out from the latter, confirming the trend reversal, or is a rejection likely instead?

The UNI price has fallen since its yearly high in March, but regained its footing in May, starting a rapid upward movement. The price has increased by 65% so far this month.

Despite this notable surge, the price still trades below its main horizontal resistance level. Can UNI break out, and confirm its bullish reversal, or will the resistance prove too resilient?

Positive Uniswap Announcements

On May 27, The Uniswap Foundation announced that Uniswap v4 is coming out later this year, without stating a specific date. The foundation noted that it has selected five firms to complete the auditing of the code before Uniswap v4 is deployed on Ethereum.

In other Uniswap news, the team has proposed a governance vote  on May 31. The proposal aims to incentivize UNI token holders to stake their tokens by improving rewards.

If the proposal passes, it will enhance governance efficient and promote the long-term sustainability of the Uniswap Protocol.

Finally, in its financial summary  for the first quarter of 2024, Uniswap noted that it has over $41 million in fiat, ensuring financial runway until the end of 2025.

Uniswap V3 Marked the Peak in Activity

Interestingly, the launch of Uniswap v3 in May 2021 marked the peak in Total Value Locked (TVL) at $10 billion. The TVL reached a slightly lower high in the end of the year but has fallen since.

The current TVL value of $6 billion is nearly 40% below that of the all-time high.

Uniswap TVL History
Uniswap TVL | Credit: TradingView

Interestingly, weekly volume  also reached its all-time high in May 2021 and has been falling since, almost mirroring the TVL readings.

A closer look at the price movement also reveals that the Uniswap price reached its all-time high in May 2021 and has fallen since. However, UNI is 75% below its all-time high price, while the TVL is less than 40% below it.

The UNI price reached its all-time high at the beginning of May, while TVL did so in the end. So, this relationship suggests that the TVL is related to the price movement, but the price movement leads.

UNI Price Moves Above $10

The weekly time frame UNI price chart shows that the Uniswap token accelerated its rate of increase after bouncing on a long-term ascending support trend line in October 2023 (green icon). This was the third bounce at the trend line since the absolute low in June 2022.

After the breakout, UNI reclaimed the $7.20 horizontal resistance area and reached a high of $17.50. The price has fallen since, validating the $7.20 horizontal area as support (green circle).

As a result, the current long-term trading range for UNI is between $7.20 and $14.50.

UNI Price Long-Term Movement
UNI/USDT Weekly Chart | Credit: TradingView

The weekly RSI and MACD give mixed readings. The RSI just increased above 50 but does not have a clear trend. The MACD is increasing but has not made a bullish cross yet.

So, a closer look at a lower time frame is needed to determine the future trend’s direction.

Uniswap Price Prediction: Reversal or Relief Rally?

The daily time frame UNI price chart shows a breakout from a descending resistance trend line that has existed since the yearly high of March 6. Such breakouts often indicate the previous trend has ended.

After the breakout, the UNI price reached the confluence of resistances at $11.45. The 0.5 Fibonacci retracement and a horizontal resistance area create this resistance.

The area rejected UNI during the first attempt (red icon), but the price lingers right below the area.

UNI Price Breakout
UNI/USDT Daily Chart | Credit: TradingView

A successful reclaim of this level will confirm that the correction is over. The MACD and RSI support this scenario since they are both increasing and have crossed the prerequisites to be considered bullish.

The short-term wave count agrees with this assessment. It shows that UNI is in an extended wave three (white) of a five-wave upward movement. The sub-wave count is in black.

UNI Wave Count
UNI/USDT Six-Hour Chart | Credit: TradingView

A likely target for the top of wave three is at $13.87, giving it 3.61 times the length of wave one. On the other hand, a decrease below the 0.382 Fibonacci retracement support level at $3.86 will put this bullish wave count at risk.

UNI Can Confirm Bullish Trend Above $11.45

The Uniswap price shows resilience by moving above $10, possibly aided by positive Uniswap news relating to the launch of v4. The main level to reclaim in order to confirm a bullish trend is at $11.45. While the price action is indecisive, the wave count suggests UNI will break out and move toward its yearly high.

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