Uniswap on Optimism, will UNI/USDT Bulls Blast Past $20?

Uniswap bulls are adamant and are hanging on in the wave of liquidation pressure.

Surprisingly for traders, the performance of UNI over the last few weeks has been quite unexpected.

Indeed, there were flowers when the project announced Uniswap v3, introducing exciting features that effectively differentiated the project from competing swapping protocols.

Uniswap Market Performance

For now, Uniswap remains one of the most active DEX in the world and UNI the most valuable DeFi token.

Even so, UNI/USDT price action is dicey. Buyers are hanging precariously in the face of unforgiving, near-insurmountable selling pressure.

In the daily chart, fundamental triggers that occasionally revive bulls are met with an equalizing stream of sellers, clipping bullish attempts, reverting UNI into a stable $3 zone below $20.

UNI is up five percent on the last trading day at the time of writing, sinking 11 percent week-to-date.

It is the increase in participation levels on the last trading day to around $440 million that may pump UNI prices, building on gains of July 14.

Still, unless there are sharp gains blasting prices—in either direction—UNI/USDT’s current state of near-equilibrium is forcing traders to the sidelines.

From a technical point of view, $15, which flashes with the 61.8 percent Fibonacci retracement level of the H1 2021 trade range, is a critical support level that traders—bulls or bears—must closely monitor.

Traders Accumulating UNI

A day after Uniswap v3 activated its Alpha on Optimism, there is a sharp increase in trading volumes.

According to trackers, UNI average trading volumes earlier today rose 6X:

Unusual #volume spike in $UNIUSDT

– 1,412,269 USD worth of $UNI traded in the last 5 mins.
– 6 times the average volume in $UNI – $USDT pic.twitter.com/tDUuH1b1RK

— Volume Alerts (@TraderWisdom) July 15, 2021

There has been a build-up of momentum over the last few days:

Unusual #volume spike in $UNIUSDT

– 1,620,929 USD worth of $UNI traded in the last 5 mins.
– 10 times the average volume in $UNI – $USDT

$binance $bsc $crypto $BTC $ETH $DOGE

For latest alerts, checkout – https://t.co/rLLR03cU0l pic.twitter.com/QFEQHnEjhm

— Volume Alerts (@TraderWisdom) July 9, 2021

The failure of prices to post strong moves in either direction could suggest a possible accumulation. Not to speculate, the best course of action for savvy UNI/USDT traders is to wait for a conclusive close above $20 or a breakdown below $15—as from the daily chart.

UNI/USDT Prices to Correct after a 70 percent Dump

On Trading View, UltimateCryptoTrader called for UNI/USDT prices to recover after dumping by over 70 percent from May 2021 peaks.

At that time, UNI was changing hands at around $43 before topping and collapsing back to spot rates.

Two weeks later, the analyst’s prognosis is accurate. The trader expects UNI prices to close above $20 and hit $23 and $32.

These are strong reaction points flashing with the 38.2 and 61.8 percent Fibonacci retracement levels of the May and June 2021 trade range.

Thus far, UNI prices remain in a tight zone with clear caps to the upside at $20.

Therefore, while there is Optimism and hopes of a correction following the decimation of May and June, risk-on traders must first wait for a conclusive close above the psychological line—at $20—before loading the dips.

UNIBear—Uniswap prices to dump below $15?

Meanwhile, another trader on Trading View, FaxMe, believes UNI bears are in control.

The analyst cites the dump of 500k UNI—or $10.2 million—by the DeFi Education Fund as a reason that may suppress bulls in the short term.

Defi education fund sold 500k UNI OTC today. Can confirm on-chain and see they got a rate of 20.4 per UNI (price is at 19.52 atm) https://t.co/uKfRyl9s9n pic.twitter.com/coKO1eexQh

— state (@statelayer) July 13, 2021

For this reason, the trader expects a dump below the ascending wedge at around $15 towards $9 and $7, respectively.

Technical charts courtesy of Trading View

Disclaimer: Opinions expressed are not investment advice. Do your research.