In the uncertainty surrounding Binance, and with the market on its toes, the sentiment has shifted towards DEXs. Uniswap has now reached a high of $16.55B in monthly trading volume, the highest in seven months.
It is still sitting a bit shy of its last highest month, April, when it was $16.62B, and as there are a couple more days before November is complete, we might see it surpassing as well.
Meanwhile, the price of UNI recovered by 77% from its October low and is still on the rise. This uptrend brought the price back to its previous high levels last seen and on the cusp of a major breakout.
Will the price of UNI continue to strive, or will it reverse to the downside?
From its peak of nearly $45 on May 4, 2021, the price of UNI has decreased by 92%, measured to its lowest point of $3.4 on June 18, 2022. From there, we saw a recovery to $9.70 on August 14 of the same year, but further on, the price formed lower highs.
These lower highs sent the price to retest its previous low and revisit the zone around $3.40 on June 12, 2023. It again did so on October 19, but the bounce from there resulted in the first same high on August 2 at $6.60.
It has already made a breakout above the descending resistance but still struggles to surpass the horizontal area, which would be a clear sign of a starting bull phase. The RSI indicates the start of overbought conditions similar to how it did around its August high when the price reversed.
So can UNI break the resistance, or will it downturn?
Zooming into the 4-hour chart and examining the wave structure of the last uptrend, we can see that it displayed a five-wave pattern. This indicates that this uptrend likely ended, and with the daily chart RSI also showing overbought conditions, it supports the assumption.
There could be another minor higher high ahead, but if so, its potential would be limited. More likely, we will see the first bull market correction that should establish its first higher low and indicate that the support plateau has risen.
Projecting with the Fibonacci retracement tool to its optimal point of 0.618, we came up with a target of $4.80. But if the price enters below the descending trendline, it could be open for interpretation.
That’s why it should stay above it on the decline and restest it for support. If the support gets validated at the retest, then the price of UNI could begin its next sustainable uptrend above $6.50.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.