Uniswap [UNI] has dropped to a critical demand zone of $5.24 – $5.5, which may have an impact on sellers if the asset sees more aggressive buying at the level.
Bitcoin’s [BTC] sharp drop from $31,000 triggered a pullback in the altcoin market. Similarly, after reaching a supply level of $6.5, UNI retreated, falling into a critical demand zone.
Will the demand zone prevent further price dumping?
Since mid-March, UNI has oscillated between key supply and demand areas, chalking sideways structure within $5.24 – $6.7. At press time, price action was within the key demand zone and could offer bulls some reprieve.
Notably, the structure was bearish at the time of writing, but the stochastic RSI hit the oversold condition. As such, sellers may soon take a back seat, allowing bulls to gain market entry. If that’s the case, UNI could recover and face another price rejection at the supply zone of $6.5 – $6.7.
In such a case, buying at the current level could offer a good risk ratio if UNI retests its range’s upper boundary. Bulls may want to consider a pullback retest or a close above $5.5 before entry. In addition, there are significant hurdles at $5.8, 50-EMA, and 200-MA.
A close below $5.24 will invalidate the above thesis. But an extended downswing could provide secondary buying opportunities at either December lows of $4.96 or November’s low of $4.71, especially if BTC falls below $27k.
Aggregated CVD rose
The aggregated CVD (Cumulative Volume Delta) spot fell throughout the first half of April. It shows sellers had more leverage in the same period. However, the metric rose at press time – showing that bulls were fighting for influence.
On the other hand, more than three-quarters of total UNI liquidations in the past 24 hours affected long positions. It reinforces a bearish sentiment which could tip sellers to inflict a bearish breakout unless BTC reclaims previous upper price ranges.