- Uniswap price dropped below the triple bottom setup at $16.72, collecting sellside liquidity.
- A quick recovery above this barrier is likely to lead to a 20% rally to $19.94.
- A breakdown of the $16.07 support level will invalidate the bullish theory.
Uniswap price is ideally positioned to start a massive uptrend as it amassed sell stop liquidity below a critical support level. Therefore, a quick recovery is more likely to spur higher movement.
Uniswap price eyes higher high
Uniswap price identified the $16.72 support three times between December 26-31, 2021, creating a triple bottom pattern. This technical formation is a reversal setup and signals the start of an uptrend.
However, due to the January 5 crash, Uniswap price dropped below $16.72, collecting sell-stop liquidity below it. Market makers use this move to engineer liquidity before a new uptrend starts.
In this 30% rally, UNI will face the first hurdle – the 50-day simple moving average (SMA) at $17.98. The bulls need to overcome this blockade to reach the $19.94 resistance line as Uniswap price created a double top. In some cases, the altcoin can retest the mentioned barrier or sweep above it to collect liquidity.
4 hour chart UNI / USDT
As things look ahead to Uniswap price, a failure to hold above the $16.72 support level would indicate weak buying pressure. Such a development could lead UNI to retest the $16.07 barrier, where the bulls could bounce back.
However, a four-hour candle close below $16.07 will create a lower bottom, invalidating the bullish theory. In this case, Uniswap could drop lower and possibly retest the $13.88 barrier.