Uniswap: Important Price Levels for UNI Traders to Monitor

Recent developments within Uniswap have led to significant price movements, prompting traders and investors to watch specific price levels. The UNI token experienced a major surge following a proposal to burn millions of tokens, which can reduce supply and benefit holders. While long-term investors may find it enticing to purchase now, they should be cautious of potential price retracements.

Key Takeaways

On Monday, UNI surged by 42% due to a proposal to burn millions of UNI tokens, which aims to decrease supply and reward holders.
Long-term investors may consider entering the market now, but a potential deeper price dip should be anticipated, allowing traders to wait for the retracement.
Uniswap [UNI] has shown remarkable advances recently, notably attributed to developments like the UNIfication proposal from November 10 and potential UNI buyback plans.

Uniswap 1-day Chart Source: UNI/USDT on TradingView

Uniswap price prediction

Current Price Trends for Uniswap

Uniswap's price trajectory has been impressive recently. Analyzing the 1-day chart, the decentralized exchange (DEX) token has regained its bullish trend, successfully breaking above the previous downtrend's lower high at $8.6. The $6.88 price point is crucial in the short term, although it did not pose significant resistance to UNI's upward movement.

Despite the bullish price action, the On-Balance Volume (OBV) indicates some caution. The buying volume that initiated the rally faces substantial selling pressure as the price moved past the $9 mark. Fibonacci retracement levels reveal that a price retreat may occur down to $6.86 and $5.92.

Short-Term Analysis of Uniswap Trends

Uniswap 1-hour Chart Source: UNI/USDT on TradingView

Focusing on lower timeframes, the rising concerns regarding Uniswap's trend become evident. The 1-hour chart indicates that the OBV has been on a downward trend for the last 48 hours. During this same period, the demand zone between $8.1 and $8.5 has shifted from support to resistance.

While the Money Flow Index (MFI) indicates some bullish momentum and buying pressure recently, it may not be sufficient to push UNI beyond the $8.6 resistance. This suggests a higher probability of a deeper price retracement toward the previously mentioned Fibonacci levels.

Uniswap Coinalyze Source: Coinalyze

The increase in Open Interest (OI) and heightened funding rates observed on November 11, alongside the UNI rally, demonstrated strong short-term bullish sentiment. However, since then, Open Interest has started to decline, and the Funding Rate has dipped toward zero, briefly entering bearish territory in the last 24 hours.

An uptick in long liquidations further complicates the scenario. Overall, UNI faces a predicament where long liquidations and the closing of positions—whether for profit or not—have contributed to decreasing Open Interest. As things currently stand, bears hold the upper hand and may push for a more significant price decline to the $6.86 level.

Disclaimer: The views expressed in this article are solely the author's and do not constitute financial, investment, or trading advice.