The Uniswap price has again found a floor at the support of a rising trend line. But despite UNI bouncing 35%, the rally may be stalling.
Uniswap is trading at $18.39, a 24-hour increase of 1.79%, increasing UNI’s 7-day advance to 15.12%.
Decentralized liquidity provider Uniswap is presently the 11th largest cryptocurrency and has a market capitalization of just short of $9.6 billion. Which, for now, gives it a healthy $1.5 billion lead over 12th ranked Bitcoin Cash.
Like many of its peers, the Uniswap price is higher this morning on signs that confidence is returning to digital assets. This is due partly to Elon Musks appearance at the ‘B-word’ Bitcoin conference last week, where he confirmed ownership of several cryptos.
Furthermore, the Tesla chief told the conference that the EV maker could start accepting BTC again.
This resulted in UNI reversing sharply higher from Tuesday’s $14.2750 low, which came on the back of its longest losing streak ever.
The early indications are encouraging, but recent history reminds us not to get too carried away at the first signs of recovery.
The daily chart clearly shows a strong support level at $14.020. A rising trend line links two former cycle lows from the 23rd of May at $12.9299 and the 22nd of June’s $13.4866 bottom.
Furthermore, if the price remains above $14.0200, it will result in a successful third test of the support, cementing the trend lines’ significance.
However, robust resistance overhangs the Uniswap price.
Firstly, a descending trend line from the 26th of May high is present at $20.5100. This trend line has rejected several rallies over the last 2 months and is a considerable level of resistance.
Additionally, the 50-day moving average at $20.0600 lends weight to the trend line resistance. On top of that, the 50 DMA remains below both the 100 and 200-day averages, indicating sentiment remains weak.
Notably, the positive price action has lacked an increase in volume, suggesting a lack of confidence.
Therefore, at the moment, I am sceptical the rally is sustainable. Although should UNI advance beyond $20.51, my view turns from sceptical to outright bullish.
The biggest threat to the price is a failure to hold the $14.020 support. In this event, the outlook turns decidedly negative.
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