Key Takeaways
Uniswap (UNI) has been caught in a wave of bearish pressure, mirroring the broader trends across the crypto market.
The governance token of Ethereum’s largest decentralized exchange has dropped to $12.70, marking a 25% decline over the past month.
With UNI struggling to hold key support levels, will it reverse the trend, or is it on the brink of a deeper plunge?
According to the daily chart, UNI’s price reached a local high of $18.68 on Dec. 9, 2024. Since then, the token has been trading within a descending triangle.
A descending triangle is a pattern that occurs during a market downtrend. It is formed when a series of lower highs converges with a flat or declining support level.
As the price continues to make lower highs, the pattern suggests that selling pressure is increasing and typically indicates that the downtrend might continue.
For UNI, the price is at the key support level, which was vital to the rally, at $18.68 in December. However, the Moving Average Convergence Divergence (MACD) has dropped to the negative region.
This drop indicates bearish momentum around UNI. The Chaikin Money Flow (CMF) has also followed the MACD trend, reinforcing strong selling pressure.
If sustained, then UNI’s price might fail to bounce off the lows anytime soon.
From an on-chain perspective, IntoTheBlock data also shows that UNI’s price could face resistance between $13.51 and $13.81.
However, around that period, the broader market condition was better, and Bitcoin’s (BTC) price was not below $92,000. Therefore, if momentum remains weak, UNI might drop below this region.
In that scenario, the token’s value might sink to $8.50. However, if UNI bounces off the $11 support, this trend might change. If that is the case, the altcoin might rally toward $17.