Uniswap Price Rally Exhausts at a key level indicating a bearish reversal

Summary:

The Uniswap price has twice failed to clear key resistance resulting in a bearish double-top pattern forming on the daily price chart.

The Uniswap price has twice failed to clear key resistance resulting in a bearish double-top pattern forming on the daily price chart. Unless the bulls can force Uniswap (UNI) above $27.50, the price is in danger of erasing the recent gains.

Uniswap received a boost late last month when the Peoples Bank of China (PBOC) enhanced the crackdown on cryptocurrencies. The central bank’s website reminded investors that all crypto-related activities are illegal and revealed that offshore entities could no longer offer services to Chines nationals. Centralized exchanges Binance (BNB) and Huobi immediately suspended services in China, sending their native tokens sharply lower. However, investors wagered that decentralized Exchanges (DEX’s) would benefit from the move. As a result, the Uniswap price surged 55% between the 26th of September and the 1st of October. However, the rally stalled when it met the 200-day moving average and trend line resistance. Since then, UNI has started to turn lower, which could signal a near-term top.

UNI Price Forecast

The daily chart shows Uniswap failed to clear the 200 DMA at $26.58 and trend resistance at $27.80, leaving a double-top formation. Subsequently, in the last three days, the price has retraced 12% to $25.00. Until UNI clears out the overhead resistance, the path of least resistance is lower. Below the market, the 100 DMA at $23.38 should offer initial support. However, if the Uniswap price drops below $23.38, an extension towards September’s $16.73 low looks likely.

On the other hand, if the price clears $27.80, it would be an extremely bullish development. In that event, the logical first stop is the 4th of September high at $33.87. However, UNI may exceed the September high and target the $48.12 record set in May if the broader market continues to recover.