- Uniswap price action has set up a bull trap.
- With the downtrend still intact, bulls are scrambling to protect $22.
- If $22 breaks, expect support to evaporate and give bears a free ride to $13.
Uniswap (UNI) has formed a bull trap in its downward trend. With bulls licking their wounds, expect fewer support at $22. A break would spell more downside risk towards $13 for October
Uniswap bulls wait for the stoplights to turn green, but support is weak
Uniswap bears have had great success trapping the bulls. Buyers attempted to break the downtrend by breaking the red descending trendline. A failed break above the 55-day Simple Moving Average (SMA) at $26 trapped a lot of bulls with stops that ran below that same SMA and just below the red descending trendline.
On that note, UNI bears are further dictating Uniswap price action with a well-respected descending trendline that forms the continuation basis of the current downtrend. This pushes price action further towards $21.05. Although in the past it has been quite respected in Uniswap, this level has been broken already too many times.
UNI/USD daily chart
As bulls have been stopped on several attempts, these support levels will not be defended much more. As Uniswap prices will start to dip lower and lower, expect bears not to find too much resistance in their way. With that, $19.30 is in the same camp as holding some but not providing substantial support. This clears the road towards the $13 low from June 23.
Unless market sentiment can shift towards risk with some positive catalyst, Uniswap price action could see bulls come in rapidly and firing at all cylinders with a quick breakout trade above the red descending trend line. A first exciting price target would be $26, with both the 55-day and the 200-day SMA as resistances.
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