A well-established Ethereum DEX platform, which has gradually set lows since its May peak, has approached the support level of a descending wedge, which is generally considered a bullish formation.
Uniswap (UNI) prepares bullish formation after falling 83%
On January 19, Uniswap (UNI) breached a long-term support level, but has since been showing positive signals within a bullish pattern. Since May 1, when the ATH level reached $45, the price of UNI has been in a bearish trend. Between May and December, it struggled to initiate many upside moves, fluctuating in the $15 horizontal zone. But it was all in vain and UNI had to close below its marks with the red dot below on January 19, 2021. So far, it has slumped to $7.51, which represents an 83% drop from ATH on February 22. The next critical level of support is around $5, a zone it hasn’t touched from January 2021.
Altcoin bulls are getting ready
A bullish pattern already exists as the daily chart does not show that UNI price is trading inside a falling wedge. The falling wedge is a bullish pattern and means a breakout from it would be the most likely scenario. Also, both the MACD and RSI showed large bullish divergences (green lines). Bullish trend reversal often precedes such divergences. All in all, when paired with a bullish wedge, a UNI breakthrough seems like the most plausible outcome. If this happens, the nearest level of resistance is $19.50. This is a horizontal resistance zone and 0.5 Fib retracement resistance level.
Analysis of wave counts
According to crypto analyst TheTradingHubb, UNI is stuck in a correction pattern, indicating that a long-term uptrend is expected to follow.
The downtrend since the all-time high is likely to be an A-B-C corrective structure with A:C waves at a ratio of about 1:0.618. In black, the sub-wave number is shown. The shape of the falling wedge indicates that Wave C has turned into an ending diagonal. A strong breakout and uptrend are often followed by such formations.
As a result, it backs up daily time frame readings and price activity.
