Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- UNI formed a bearish rising wedge pattern.
- Open interest rates stagnated, and the long/short ratio favored bears at press time.
Uniswap [UNI] enjoyed a double boost last week. Firstly, the increased traction for DeFi systems after the U.S. bank run made it one of the benefactors. Secondly, Bitcoin’s [BTC] rally tipped UNI for an extra spike.
Read Uniswap [UNI] Price Prediction 2022-23
At press time, BTC maintained the $27K zone, showing bulls were adamant and not exiting their positions – a bullish sentiment that could push it higher or become a bull trap if next week’s (March 21/22) Fed meeting ends up in a blood run.
A consolidation, price dump, or rally for UNI?
Source: UNI/USDT on TradingView
UNI dropped from $7.6 to $5.2 before aggressive buying pushed it into recovery. However, the DEX token curved a rising wedge pattern – a typical bearish formation highly associated with reversals. If the conventional wisdom holds, UNI could witness a sharp retracement, especially if BTC drops below the $27K zone.
Bears could wait for a break below the pattern before making moves. The target would be the height of the rising wedge (18%). In addition, other crucial supports like 23.6% Fib level ($5.8) and $5.24 must be cleared for bears to gain leverage.
A close above the wedge pattern and 61.8% Fib level ($6.713) could push UNI to $7.114 or $7.63, especially if BTC remains bullish.
The Relative Strength Index (RSI) moved sideways but in the upper range, showing buying pressure stagnated amidst increased selling pressure.
The OBV (On Balance Volume) recovered, showing trading volumes increased, boosting the uptrend witnessed in the past few days.
Open interest rate stagnates
Source: Coinglass
According to Coinglass, UNI’s open interest (OI) rate slowed and stagnated after a sharp increase on 17 March. It shows money flowing into and out of UNI’s futures market remained the same – a neutral position that neither gives bulls nor sellers leverage.
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But the long/short ratio showed bears had considerable leverage on the higher timeframe. It means more investors were bearish on UNI’s long-term prospects – a position that could weigh on the recovery and tip bears to break below the rising wedge pattern.
Source: Coinglass