Decentralized exchange Uniswap (UNI), based on Ethereum, has been experiencing high network activity along with significant selling pressure recently. Renowned cryptocurrency analyst Ali Martinez suggests that UNI may soon undergo a major trend breakout.
Selling Pressure in Uniswap is Dwindling
Crypto analyst Ali Martinez reports that Uniswap is on the verge of a potential breakout and that 87.56% of UNI investors are currently in a "loss" position. Investors are facing a scenario where selling pressure appears to be diminishing, a strong support level is forming around $4, and optimism is growing among UNI stakeholders.
The analyst also notes a significant increase in the number of notable UNI transactions, indicating increased activity from institutional investors and leading UNI holders at current price levels. These major players may be strategically investing or positioning themselves for Uniswap's upcoming major rally.
Key Levels to Watch in UNI
As of writing, UNI is trading at $4.15, up 1.31% in the past 24 hours. According to technical analysis, the key support level for UNI is currently around $4. Martinez reveals that despite Uniswap forming a significant support level at $4, there are two important resistance walls that need to be overcome for a bullish breakout. The first obstacle is at $4.23, where 7,000 wallet addresses collectively hold 14.24 million UNI tokens, while the second obstacle is at $4.45, with 2,000 wallet addresses holding 10.28 million UNI tokens.
On the daily timeframe, the Relative Strength Index (RSI) suggests a possibility of a 8% correction to $3.70 if the price falls below the support level at $4.02. Moreover, in such a scenario, selling pressure could increase, potentially pushing UNI down to $3.35, representing a significant 17% drop.
Despite these bearish scenarios, if buying pressure manages to push UNI to close above $4.38, a potential 15% increase to $5.04 could be observed. This highlights the inherent high volatility and unpredictability of the cryptocurrency market, emphasizing the importance of cautious and prudent approach for investors.
