Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- UNI’s price action hit a roadblock at the $4.4 resistance, resulting in another price drop.
- Sellers looked to gain the advantage with an increase in short positions.
Despite the bullish market conditions, Uniswap [UNI] failed to break above the mix of a resistance level and bearish order block at the $4.4 price zone.
Read Uniswap’s [UNI] Price Prediction 2023-24
AMBCrypto’s previous outlook on UNI highlighted the selling pressure that the altcoin was under, with bulls needing to scale multiple price hurdles. While bulls were able to scale the $4.2 price hurdle, the bearish order block at $4.4 was a step too far.
This led to an 8% drop over five days, with UNI trading at $4 as of the time of writing.
Low demand limited bullish rally
The On Balance Volume (OBV) declined by over $5 million within the period under consideration. This loss of trading volume stalled the bullish rally, which allowed sellers back into the market at the resistance level.
With price trading at a mid-point between the $4.4 resistance and $3.8 support, a retest of the $3.8 support looked more likely in the short term.
This was further supported by the Relative Strength Index (RSI) dropping below the neutral 50 – a sign of weakening buying pressure and an increase in selling pressure.
Thus, both UNI’s price action and on-chart indicators revealed the short-term bearish bias in the market.
Another factor that could be affecting UNI is the recent imposition of an interface fee of 0.15% on Uniswap with traders favoring a sell-off rather than an accumulation, based on AMBCrypto‘s findings.
Traders chose to go short based on UNI’s spot market activity
How much are 1,10,100 UNIs worth today?
Market speculators in the futures market were bearish in the short term. According to Coinglass, the exchange long/short ratio showed that shorts had a 51.38% share of the open contracts on UNI.
This hinted at a further price dip in the short term, with the $3.8 support becoming the best possible price level for another bullish rebound.