The Uniswap price recovery may soon run into trouble. How UNI performs as it approaches $20.00 will dictate if the recent bounce has more room to run.
Uniswap is last trading at $17.02, lower by -$0.7780 (-4.54%).
UNI’s current market cap is just under $4 billion, ranking it as the 10th largest cryptocurrency, just behind 9th placed Polkadot.
The below chart from Defi Pulse shows the decentralised trading protocol currently has Total Value Locked (TVL) assets of around $5 billion, compared to a peak TVL of $8 billion in May.
The strong upward momentum that DeFi projects enjoyed earlier in the year has slowed dramatically of late, resulting in tough trading conditions for Uniswap investors.
After reaching a peak of $48.12 on the 5th of May, the Uniswap price has been confined within a clear downtrend. This has resulted in UNI’s market cap falling from over $23 billion to its current value, just south of $10b.
UNI Technical Outlook
An obvious triangle formation can be seen on the daily price chart. The almost-horizontal base is formed by linking the 23rd of May low at $12.90 and Tuesday’s, $13.48 bottom. This should be viewed as the immediate price support.
Additionally, the descending top edge of the triangle links the high of the May 19th crypto crash with a series of tops during June. This trend line is now visible at $20.00. Furthermore, a horizontal resistance line now reinforces the validity of the resistance.
As long as the price remains below $20.00, the downtrend will dominate the price action. Furthermore, UNI will struggle to maintain a recovery unless some strength is seen in Bitcoin and Ethereum. Presently, the market leaders are reversing yesterday’s gains, although trading conditions are certainly less volatile.
For the moment, the Uniswap price should continue to stay with the boundaries of the restrictive pattern. However, a break of either support or resistance should lead to an outsized move.
Presently the market is not giving much of an indication of which scenario will arise first.
Don’t miss a beat! Follow us on Telegram and Twitter.
Uniswap price chart (Daily)
Follow Elliott on Twitter.