UNI price analysis suggests a potential breakout to $16.10 with bullish indicators. However, failure at $12.10 could lead to a 30% drop.
The Uniswap (UNI) value surged to $12.85 on February 24, marking its highest point in two years before undergoing a slight decline.
UNI exhibited a breakout from both horizontal and diagonal resistance levels during its recent upward trajectory.
UNI Breaks Free from Resistance
Analysis of UNI on a weekly time frame reveals a consistent uptrend since October 2023, where it rebounded from a longstanding horizontal support zone. This upward momentum led to a breakthrough from a descending resistance trend line the following month, a trend line that had persisted for 480 days.
Following multiple retests, UNI initiated another upward surge at the onset of 2024, breaking through a horizontal resistance zone. This ascent peaked at $12.86 last week, followed by a minor retreat.
The weekly Relative Strength Index (RSI) corroborates this uptrend. Market participants frequently refer to the RSI as a momentum gauge to discern overbought or oversold conditions and to make informed decisions regarding asset accumulation or divestment. Readings surpassing 50 along with an upward trajectory indicate prevailing bullish sentiment, whereas readings below 50 suggest the opposite.
Initially, the upward surge was preceded by a bullish divergence in the RSI (illustrated by the green trend line). Subsequently, the RSI has continued its upward trend and recently breached the 70 mark. Notably, there is no bearish divergence to nullify the preceding upward movement.
UNI Price Forecast: Path Following the Breakout
An examination of the daily time frame echoes the bullish sentiment expressed on the weekly chart, primarily attributable to wave analysis and RSI trends.
According to the prevailing wave count, UNI's upward trajectory is anticipated to persist. Technical analysts rely on the Elliott Wave theory to ascertain trend directions by scrutinizing recurring long-term price patterns and investor sentiment.
The wave count suggests that UNI is currently in wave three of a five-wave upward cycle (depicted in white), with the sub-wave count delineated in black, indicating UNI's current position in sub-wave four.
If this wave count holds true, UNI's price is expected to resume its upward trajectory following the current corrective phase. This could propel UNI's price towards the next resistance level at $16.10, aligning waves one and three in a 1:1.61 ratio, signifying a 50% upward movement.
The daily RSI lends credence to this scenario, as it continues its ascent and remains above 70.
Despite the optimistic UNI price outlook, failure to breach the $12.10 highs might trigger a nearly 30% downturn towards the nearest support level at $7.80.