Analyzing if Uniswap [UNI] bulls can induce a rally before this pullback

While UNI was showing an uptrend at the time of writing, it was reclaiming the $5.6 support. If buyers insist on protecting immediate help, UNI could see a compression phase in the coming sessions. At press time, UNI is trading at $5.5, down 94% in the last 24 hours.

When can buyers reverse UNI’s patterned breakdown rally?

Long-term resistance from the UNI trendline has provided compelling downside moves for the past three months. Despite the rising wedge’s recent rally above this barrier, sellers quickly pushed UNI below resistance to depict its elevated edge. Consequently, the decline marked a classic bearish pennant on the four-hour timeframe. 

The resulting breakout marked a more than 10% retracement as bulls struggled to reject lower prices near their relatively high liquidity zone at $5.2-$5; if buyers double down on their intentions to stop the bleed by breaking the red candlestick strip, UNI could attempt to trigger a rally towards its trendline resistance from its highly liquid area.

Any close above $6.15 can help the buyers extend their rally toward the 50/200 EMA. But a reversal of trendline resistance could further fuel UNI’s bearish bias for some time. The Relative Strength Index (RSI) continued its influence in the bearish zone after failing to break even in its recent rally. Additionally, the -DI (red) held its position above the +DI (green) along with a relatively directional solid trend (ADX).

Open Interest analysis

According to data from Coinglass, UNI saw a more than 10% increase in its total open interest in futures across all exchanges. It opens. Once these shorts start to cover, it could also indicate a bullish trend reversal. Finally, overall market sentiment and on-chain analysis would be crucial to making a profitable bet.

Also, buyers should keep a close eye on Bitcoin’s movement as UNI shared an 850-day correlation to the actual coin.