The most recent reversal in Uniswap [UNI] was a bearish pull below the trendline resistance (white, dashed). As a result, the sellers caused a string of red candles to develop as the altcoin established a continuation pattern.
UNI recaptured the $5.6-support while still showing rebounding characteristics at the time of writing. If buyers insist on retaining immediate support, UNI may experience a compression period in the coming sessions.
UNI was trading at $5.5 at press time, down 3.94% in the previous 24 hours.
When can buyers reverse UNI’s patterned breakdown rally?
Source: TradingView, UNI/USDT
UNI’s long-term trendline resistance inflicted convincing bearish pulls over the last three months. Despite the recent rising wedge rally above this barrier, the sellers quickly pulled UNI below the resistance to depict their heightened edge.
In consequence, the decline chalked out a classic bearish pennant in the four-hour timeframe. The resulting breakdown marked an over 10% retracement while the bulls strived to reject lower prices near its relatively high liquidity zone in the $5.2-$5.5 range.
Should the buyers double down on their intentions to stop the bleeding by breaking the streak of red candles, UNI could aim to provoke a rally toward its trendline resistance from its high liquidity range.
Any close above the $6.15-mark can aid the buyers to extend their rally toward the 50/200 EMA. But a reversal from the trendline resistance could continue fueling UNI’s bearish inclinations in the coming times.
The Relative Strength Index (RSI) continued its sway in the bearish zone after failing to break above the equilibrium in its recent rally. Moreover, the -DI (red) maintained its position above the +DI (green) alongside a relatively strong directional trend (ADX).
Open Interest analysis
Source: Coinglass
According to data from Coinglass, UNI registered an over 10% rise in its total Futures Open Interest across all exchanges. This incline accompanied a declining 24-hour price.
More often than not, such a combination indicates that new short positions are being opened. Once these shorts begin to cover, this could also hint at a bullish reversal.
Finally, overall market sentiment and on-chain analysis would be vital for making a profitable bet. Also, the buyers should keep a close watch on Bitcoin’s movement as UNI shared an 85% 30-day correlation with the king coin.
