- UniSwap rally from the primary support at $2.5 rejected at $3.5.
- The 50 SMA in the 4-hour range limits upward price action in conjunction with the descending parallel channel resistance.
UniSwap has lost over 60% of its value since its all-time high of $8.6. The token received immense support after the launch in September but failed to sustain the uptrend, mainly due to decreasing liquidity. Nonetheless, the extended breakdown recently approached a bottom around $2.5, as reported. A reversal ensued from this level, with the price making a remarkable upswing. At the time of writing, UNI is trading at $3.24, following a rejection at $3.5.
UniSwap resumes the downtrend
Some people might argue that UNI's downtrend never hit bottom because the token is still trading within a descending parallel channel. However, it is essential to consider a 16% surge over the last 24 hours. The reversal from the channel support broke above the middle boundary before hitting pause at the upper trendline. UNI/USD was also rejected by the 50 Simple Moving Average (SMA) in the 4-hour timeframe.
The Relative Strength Index (RSI) brings to light a developing bearish momentum following the rejection at $3.50. To avert the potential losses, buyers must pull the price above the channel's upper boundary resistance as well as the 50 SMA.
UNI/USD 4-hour chart
IntoTheBlock's IOMAP model reveals intensifying selling pressure towards $3.5. The most significant hurdle runs from $3.4 to $3.5. Previously, nearly 22,400 addresses bought roughly 15.4 million UNI in this range. Although the short term resistance at $3.3 might be brought down, most buying pressure will be absorbed, sabotaging the bulls' efforts.
UniSwap IOMAP chart
On the downside, the lack of a robust support area suggests that a reversal could erase most of the progress made in the last 24 hours. Meanwhile, some of the selling pressure could be absorbed in the range between $3.01 and $3.09. Here, 116 addresses previously bought roughly 8.3 million UNI.
The "Daily New Addresses" metric shows a slight increase in the number of new addresses joining the network. A downtrend recorded from the beginning of October bottomed out at roughly 2,100 addresses, giving way for a spike to approximately 3,300 addresses on October 8. The new addresses' continued growth is a bullish signal for the network and UniSwap's value.
UNI new addresses chart
Looking at the other side of the picture
It is worth mentioning UNI has drawn investors' attention following the bounce from $2.5. If the token uptake rises based on the increasing number of new addresses joining the network, then the uptrend could receive a fresh boost. Price action above the descending parallel channel and the 50 SMA will most likely pave the way for gains beyond $4, invalidating the expected reversal.
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