Uniswap bulls await catalyst for the breakout to $30

Uniswap (UNI) started a fresh uptrend on November 26 but now has investors puzzled as both the 55-day and the 200-day Simple Moving Averages (SMA) are forming a cap preventing further upside. The Relative Strength Index (RSI) shows that bulls are being very busy bees with a spike in the RSI back above 50,showing that buyers are pre-positioning themselves for the next rally, which could come as soon as supportive tailwinds emerge, serving as a catalyst for the breakout higher.

Uniswap is ready for the breakout, holding 50% gains

Uniswap saw investors buying positions at the end of November, with the rally holding to a short-term ascending trend line.  Bulls are now hesitating, however, as they try but fail to push price beyond $24, due to a blockage formed by both the 55-day and the 200-day SMAs. Meanwhile, the RSI reveals that bulls and investors are very busy buying chunks of Uniswap, looking to gear up for an imminent breakout above those moving averages. 

UNI price action needs a catalyst to spark the fuse for the pop and breakout higher. With current market sentiment, that could be a headline on the Omicron virus that proves to be less severe and less life-threatening or headlines suggesting current vaccinations are resistant enough to fight  this variant. Any other element that would shift global market sentiment to risk-on would do the trick equally well.

UNI/USD daily chart

If these catalysts emerge, expect bulls to quickly face and break through the monthly R1 and $27, before meeting the first tough resistance at $29.09. The next profit target from there is likely to be  $33.87, which was September’s high. At that point, the rally will probably halt and fade as bulls hit a quarterly high and R2 resistance at $33.27 – a double-resistance level. 

Should a catalyst not emerge relatively soon, expect bears to gently take back control and stop the uptrend by breaking the trend line towards $19.29. Should negative headlines about Omicron hit the wires, expect a spiral acceleration that will result in a nosedive for Uniswap price action back towards $12.92.