The King of DeFi holds onto its last breath as the next daily candle close may determine whether UNI falls into a bottomless pit after breaking an enormous structure or if it survives BTC’s savage price momentum.
The number one governance token has enough strength to stay contained within a high timeframe structure which has been respected since November. However, UNI is not strong enough to bounce and show investors that it still attracts impressive interest.
Not much has happened with Uniswap in the past few months. Since the project ended its unique liquidity mining program on November 17, a large portion of the decentralized exchange’s users has left the platform. For an entire month, liquidity migrated from Uniswap to other DEXs like SushiSwap and Bancor.
During that period the project has even managed to lose its number one position on the DeFi leaderboard. According to information from the market data aggregator DeFi Pulse, Uniswap is now positioned as the market’s 4th largest project.
With only $1.46 billion in locked collateral, the exchange still possesses less than half the liquidity it once hosted in November.
With no new updates or announcements coming out, it is very unlikely for Uniswap to recover in the next few months. The community still waits for the long-rumored Uniswap V3 protocol, but founder Hayden Adams has revealed nothing regarding the future update so far. With nothing in sight, it appears that investors have lost their appetite and optimism for the project.
UNI must break triangle structure above $3.91 to turn bullish
Just like the fundamentals, UNI does not bode well from the technical side as well. As we have previously mentioned, the token is stuck within a structure that gives no leeway to either side.
Nevertheless, bears appear to have more freedom given that prices have wicked below the triangle structure numerous times in the past week.
For UNI to show bullish determination it must close a daily candle at least above $3.74. As prices are moving towards the tip of this triangle the range will become shorter and shorter.
For bulls to regain their hope, UNI should not only tap $3.91 but break and close above it as well. Only then will investors be sure that Uniswap has a chance to dominate the DeFi market again. Otherwise, it will end up just like many other altcoins that are struggling at the moment.
Since its launch in September UNI never had the chance to revisit its old ATH. While the token bounced from an incredible low at $1,75 the price increase was not that commendable. In a dramatic turn of events, bulls could potentially step in and save the project, but will they?
Unless something unexpected happens by the 9th of January UNI should continue ranging between $3.44 and $3.94. Both sides of the market should note that at one point during that period the token will have to make a choice and move strongly in either direction.
Do bears have a stronger case at the moment? Perhaps. But do bulls enjoy the support given by Bitcoin’s sharp rises? Definitely. Just like all other altcoins UNI will simply have to wait for BTC to consolidate if it wishes to move higher.