- Uniswap faces strong resistance at $5.50, with a bearish trend still in play until it breaks this level.
- Traders should remain cautious, as further downside to $4.60 or $3.70 is possible if the resistance holds.
Uniswap (UNI) has recently faced resistance around the critical $5.50 mark, and the outcome of this battle could shape the short-term trajectory for the token. While the broader market received some relief, sparking a price bounce for UNI, traders should exercise caution until the token can decisively break past this key level.
Over the past 24 hours, UNI saw a strong 20% bounce from its local lows near $4.55, reaching $5.50. This price action marked a retest of the former support level, which has now flipped to resistance. However, at the time of writing, UNI bulls have struggled to break through this barrier, signaling that the bears still have control of the market in the short term.
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Technical indicators suggest that the broader trend remains bearish. The Relative Strength Index (RSI) has remained below the neutral 50 since January, and the price has been making lower lows and lower highs over the past two months. This consistent downtrend raises concerns that UNI might not be out of the woods yet.
Despite the downtrend, the On-Balance Volume (OBV) indicator has not dropped below its March lows, hinting that there could still be potential for a recovery. However, this remains speculative until UNI can break the $5.50 resistance and shift the market structure.
Looking at the short-term price action, UNI has been trading within a descending trendline over the past 10 days. Although the recent bounce above the neutral 50 on the RSI is a glimmer of hope for bulls, it is not enough to confirm a bullish reversal. If UNI fails to break above $5.50, the price could fall back toward the next support level near $4.60, and a further decline to $3.70 cannot be ruled out.
For traders, caution is essential. Until UNI can convincingly reclaim $5.50 as support, the market remains in a bearish posture. If it fails to do so, further downside is likely, and shorting the token could be a viable strategy for those looking to capitalize on continued weakness.
As always, these insights are based on technical analysis and should not be construed as financial advice. Traders should do their own research and consider market conditions before making any trading decisions.
