Uniswap reaches historic support level, could this be the end of the altcoin's bear trend?

Uniswap (UNI) price has reached a historic support level, which has proven critical at preventing further losses for the altcoin several times before. With this buyer congestion zone coming into play, the bear trend for UNI could have reached its turnaround point. A small green candlestick is forming, landmarking the significance of the critical multi-month support.

Also Read: Uniswap price rallies on Friday as UNI bulls could still make it to $5.70 for a turnaround

Uniswap price could be ready for a 15% upswing

Uniswap price may have reached the end of the road for the bear trend as UNI attempts to scale a recovery rally. The possible U-turn comes amid the presentation of a critical multi-month support level around $4.88, which has proven significant several times before – on November 10, November 22, and December 29, to name a few.

With bulls demonstrating a resurgence in the form of the green bar forming, an increase in buyer momentum could set the tone for Uniswap price to run up and restore above the immediate hurdle at $5.39. In a highly bullish case, UNI could extend north to tag the early May highs around $5.63, which would denote a 15% upswing from the current price.

The Relative Strength Index (RSI) had just tipped upward, a bullish sign indicating more buyers flocking to the UNI market.  It is at roughly the same level as it was at the shallower late April lows, suggesting downside momentum has dried up. 

Meanwhile, after a nearly unanimous governance vote (99.99%) held in early April, a major upgrade to the popular Uniswap DEX, Uniswap V3, has just passed and is set for deployment on Gnosis Chain. With users expecting benefits like improved capital efficiency and more flexible and customizable fee structures delivered through a greatly improved UX, the news could act as a bullish fundamental catalyst for Uniswap price.

UNI/USDT 1-Day Chart

The daily chart above shows that Uniswap price faces relatively strong resistance at $5.39, $5.63, and the 50, 100, and 200-day Exponential Moving Averages (EMA) at $5.71, $5.92, and $6.23 respectively. Bulls would be confronted by selling pressure from these levels.

GIOM Metrics

On-chain metrics from IntoTheBlock's Global In/Out of the Money (GIOM) model underscores the significant hurdles in Uniswap price's way northward. For example, the immediate barricades at $5.39 and $5.63 are within the GIOM's $5.35 and $6.08 price range, where a large cohort of approximately 57.49 million UNI are being held by roughly 47,060 addresses.

Any attempts to push the price above this level would be met by selling pressure from that cohort of investors who – relieved that price has rallied them back to breakeven – may want to snatch at early profits. The ensuing supply pressure would challenge Uniswap price's upward move. This could see UNI resort back to the $4.88 support level. To avoid further losses, traders may consider placing their sell stops around this area.