Uniswap (UNI) broke from a long-term support level on January 19, but showed several bullish signals within a bullish pattern.
UNI has been declining since May 1, when it hit a record price of $45. In the May-December period, it bounced in the $15 horizontal area and tried to initiate several upward moves.
However, all of them were unsuccessful and UNI went bankrupt on January 19, 2021 (red icon).
So far, it hit a low of $7.51 on Feb 22, which represented an 83% drop from an all-time high.
The next closest support area is at $5. Previously, the level has not been reached since January 2021.
UNI creates high standard
The daily chart is considerably more bullish as it shows that UNI is trading inside a descending wedge. The descending wedge is considered a bullish pattern, meaning a breakout from it would be the most likely scenario.
Furthermore, both MACD and RSI generated very significant bullish divergences (green lines). Such divergences often precede uptrend reversals. Therefore, when combined with the bullish wedge, this suggests that a breakout from the UNI is the most likely scenario.
If it occurs, the closest resistance area would be at $19.50. This is the 0.5 Fib retracement resistance level and a horizontal resistance area.
Wave count analysis
Cryptocurrency Trader@TheTradingHubb stated that UNI is mired in a corrective pattern, meaning that a longer-term upward move is likely to follow.
It is possible that the downward movement from the all-time high is an ABC corrective structure, in which the A:C waves have a ratio close to 1:0.618. The sub-wave count is given in black.
Wave C has developed into a final diagonal, which is noted by the shape of the descending wedge. Such patterns are often followed by a sharp break and an upward move.
Therefore, it supports daily timeframe price action and readings.
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