Uniswap’s governance token – dubbed UNI – has been struggling to form a long-term bottom, as each rally results in it seeing significant selling pressure that stunts its growth and leads to further downside.
This has led to the token seeing choppy price action, which has generally favored sellers. Bulls are now trying to slow the cryptocurrency’s descent and form a base of support around $4.00, but it remains unclear as to how long this level may hold strong.
One trader, while speaking about the cryptocurrency’s near-term outlook, explained that he wary of calling this a bottom for Uniswap’s UNI, adding that he would like to see a break back above $4.68 first.
That being said, a break below this level would also be grave, potentially leading it to plummet down towards its recent lows within the $3.00 region.
Uniswap Struggles to Build Mid-Term Support as Selling Pressure Continues Mounting
At the time of writing, Uniswap’s token is trading down just under 7% at its current price of $4.05. This is around the price at which it has been trading at throughout the morning hours, with buyers attempting to defend $4.00.
The selling pressure here has been rather significant and has not allowed for the token to post any capitulatory losses.
Recently, the hype surrounding the token has died down, and there aren’t any immediate catalysts to drive it higher.
That being said, the potentially imminent release of Uniswap V3 is one event that could sway the cryptocurrency’s price. The new version is expected to add a plethora of new features to the platform, including some additions that give Uniswap functionality that is more similar to that of a centralized exchange.
A potential vote on distributing platform fees to UNI holders could also give its price a serious boost.
Analyst: UNI Has Yet to Confirm a Long-Term Bottom
He notes that he is closely watching for a strong bounce at $4.00 coupled with a break above $4.68 before he flips long on UNI.
“Still not a real sign of strength on this one. I’d want to see such a clear bottom confirmation (possibly with bullish divergences) in the green zone here. If that happens, we might be seeing a reversal. If not -> patience for longing.”
Image Courtesy of Crypto Michaël. Chart via TradingView.
Unless some fundamental developments cause UNI’s price to rise, there’s a strong possibility that further weakness is imminent in the short-term.
Featured image from Unsplash. Charts from TradingView.