Uniswap’s (UNI) performance has been good over recent weeks. From the late September lows to the swing high it reached in the last 24 hours, UNI gained around 26%.
Despite its bullish momentum, UNI formed a bearish reversal pattern in the process. As a result, the altcoin could shift course in the coming few days.
Bitcoin (BTC) again failed to surpass £18.4k, and its drop below £17.1k could hasten the decline of many altcoins on the market. Short-term UNI bulls would be focusing on two crucial levels.
A rising wedge pattern appeared on the 4-hour chart. UNI had been successful in maintaining the £6.8 support level over the past few days.
But as of press time, it seemed destined to fall below. Both the horizontal support at £6.8 and the wedge’s lower trendline support could be breached soon.
The RSI was 48.46 at the time of writing. If it fell below 45 in the next few hours, it would be a sign that the momentum had shifted in favour of the sellers. Additionally, the Stochastic RSI was in oversold region.
If the £6.8 level failed to serve as support, a further price drop below the £5.83 level could lead to a bearish scenario. In this case, the 4-hour structure would change to bearish. The resistance around £5.95 could allow UNI to fall as low as £5.41–£5.59.
On lower timeframes, however, the range of £5.86–£5.95 has been a notable level. UNI could bounce from £5.95 if BTC can hold the £17.1k region in the coming hours.
According to Coinglass, the long/short ratio slightly favoured the futures market sellers. On
the funding rate side, Uniswap had been bullish over the past day with a positive funding rate.
However, the lower timeframe market players’ bearish bias has caused this to change over the last few hours.
A dip below £5.95 might trigger a decline to £5.59, especially if BTC keeps losing value.
If the 4-hour session closes below £5.83, the structure will turn bearish. Short entries near £5.86-£5.95 can be worth looking out for. A rise back above £6.31 and a subsequent testing of it as support, on the other hand, could present a buying opportunity.