This is the only thing separating Uniswap from an extended rally

This is the only thing separating Uniswap from an extended rally

Bitcoin News
July 26, 2021 by J.D. Smith
25
Taking heart from Bitcoin’s rebound from $30,000, Uniswap has been steadily rising over the past few days. In fact, gains have accumulated to over 40% in the last five days and a crucial breakout is all that separated UNI from an extended rally. At the time of writing, UNI traded at $19.78 and held the
UNI-1

Taking heart from Bitcoin’s rebound from $30,000, Uniswap has been steadily rising over the past few days. In fact, gains have accumulated to over 40% in the last five days and a crucial breakout is all that separated UNI from an extended rally. At the time of writing, UNI traded at $19.78 and held the 11th position in CoinMarketCap’s crypto rankings.

Uniswap Daily Chart

Source: UNI/USD, TradingView

Since the 19 May crash, Uniswap has tested its support zone of $13-15 thrice. On each occasion, the price managed to rebound and saw a tremendous surge in value- the most latest one being a 51% rally once UNI touched this defensive area on 26 June. Nevertheless, its rise has always been restricted within the upper boundary of its up-channel and selling pressure has soon followed.

50-SMA key moving forward? 

The 50-SMA (yellow) has run bearish for a period of over two months and has prevented upside in the market. The moving average also coincided with UNI’s upper trendline and resistance zone of $19.55-$20. Hence, an argument can be made that a successful close above the 50-SMA would trigger an upwards breakout from the pattern and push prices towards their 7 July swing high of $23.4. This would indicate a rise of 17% from its press time level. Conversely, a minor dip could be crunched at $18 and UNI’s 20-SMA (red).

Reasoning 

The Relative Strength Index did climb above 50 but there was some resistance till 55. A close eye must be kept on this indicator as a move above 55 would denote a strengthening uptrend in the market. The Directional Movement Index had already registered a bullish crossover as the +DI rose above the -DI. This was an indication of bullish trend switch. MACD line was close to a move above equilibrium while its histogram noted the buildup of bullish momentum.

Conclusion 

Uniswap eyed crucial developments over the next 24 hours that could dictate chances of an extended rally. A close above 50-SMA and $20 could spur additional buying and lift prices towards $23.44. Traders can long UNI at its press time level and take-profit at $23.4 although a safer bet would be to wait for a breakout confirmation before entering a position.