Uniswap’s UNI Could Plunge to $2.50 as Trendline Resistance Holds
Uniswap’s governance token UNI has seen mixed price action as of late, with bulls and bears reaching an impasse following the notable upswing seen earlier in the week.
The token’s price action has done little to provide investors with insight into where it will trend next, as the promising future of the decentralized exchange has not yet been reflected in its price trend.
There is a possibility that it will remain trendless until a catalyst – like the release of Uniswap V3 or fee distributions to holders – creates an incentive to buy and hold the token.
From a technical perspective, the token’s outlook is quite grave at the moment, as investors are expecting it to see a serious decline back to its recent lows before it can form a double bottom and rally higher.
These lows currently sit around $2.50, which could mean that it is in for a plunge before pushing any higher.
Uniswap’s UNI Loses Momentum Despite Market-Wide Strength
The entire crypto market is currently expressing strength due to Bitcoin’s strong push past $11,000 that came about on the heels of the news regarding Square’s acquisition of $50m worth of BTC.
The DeFi sector has performed fairly well due to this market-wide strength, but certain tokens – like UNI – are still struggling.
Following UNI’s hyped launch last month, the cryptocurrency’s price rose all the way up to a high of $8.50 before it lost its momentum and began sliding lower.
Just a few days ago, the cryptocurrency faced a capitulatory downturn that sent it all the way down to $2.50, marking a nearly full retrace of the gains it had incurred in the time following its launch. It has since rebounded to well past $3.00.
Analyst: UNI Could Dive Once More Before Uptrend Begins
Analysts believe that further downside could be imminent for the embattled Uniswap governance token.
While sharing his thoughts on where it might trend next, one popular analyst stated that a breakdown just below a key trendline it is tapping would likely lead it down to $2.50. He notes that a visit to these lows may precede the next major uptrend.
“UNI: If it breaks down – where I’m looking to re-enter. Just a possible scenario,” he said while pointing to the below chart.
Image Courtesy of TraderXO. Chart via TradingView.
Uniswap’s UNI token will likely continue tracking the price action seen by the DeFi sector, which hinges on Bitcoin’s near-term trend.
Featured image from Unsplash. Charts from TradingView.