Hey friends, hope you are well, and welcome to the new update on Uniswap ( UNI ).
Brokedown up channel and formation of down channel:
The price action of Uniswap was moving in an up-channel from the second week of Feb 2021. Finally, in the month of May the priceline broke down the support of this channel with a long bearish candlestick and after a small correction rally, the price action of UNI started the formation of the down channel . Currently, the price action is moving in this pattern and reached the resistance of this down channel.
So far it is not confirmed that the price action of UNI has been completely rejected by the resistance of this pattern because we have the fourth candlestick moving with the resistance of this down channel. At any time the price action can break out the resistance or it can be completely rejected and move down to the support again. Therefore, at this time it is very important to keep an eye on the price action to determine the breakout or an upcoming bearish move. For this purpose, we can use the different indicators as well.
Strong rejection and different support and resistance levels:
If we take a look at the different support and resistance levels on the daily timeframe, then it can be easily observed that the price action was very strong bullish from the month of November 2020 to the first week of May 2021. Finally, the priceline of Uniswap found very strong resistance at $45 and got rejected by this level. While moving down the price action broke down the $30, $25, $20, and $17 support levels respectively, and finally found support at $14. From here the price action moved up again and broke out the next resistance of $17.
Harmonic bullish BAT pattern formation:
Now on the 2-day time frame chart, the price action has formed a big bullish BAT pattern. The buying and sell targets as per the Fibonacci sequence of this patter are as below:
Buy between: $16.63 to $14.93
Sell between: $20.69 to $26.77
The maximum extent of the potential reversal zone $14.93 can be used as stop loss. As per the above targets, this trade has a huge profit possibility of 79%, and a high loss possibility is 11%. Therefore try to buy it within the potential reversal zone as low as possible.
The price action of the Uniswap was very strong bearish. But while moving down in the down channel the priceline has also completed the formation of the bullish reversal pattern. Therefore, we can expect at this is the level we have found the support and price action of UNI can start a bullish divergence from here at any time.
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