A recent article highlighted the fact that Uniswap’s daily active addresses were up by 72.5% since Monday and also depicted the same for other tokens in the DeFi space, namely Maker, Compound and AAVE. This was an early indication of a possible DeFi recovery.
Meanwhile, UNI’s price has latched onto the positive sentiment as indicated by its weekly gains of nearly 20%, which were the highest among the top 10 coins by market cap. At the time of writing, Uniswap traded at $20.37, down by 2% as part of a wider correction in the broader market.
Uniswap Daily Chart
UNI’s pickup from its demand zone of $13-16 was important as bulls avoided a sharper retracement towards late-January levels. The digital asset has risen steadily over the past two weeks and has even flipped its 20-SMA (red) back to bullish. A key resistance zone now rested between Visible Range’s POC at $20.5 and 29 May’s swing low of $21.5. A successful close above these levels could initiate the next upswing in the market. However, bulls had to negotiate a period of selling pressure before triggering such an outcome. A fall below the daily 20-SMA could result in another decline towards UNI’s demand zone.
The Relative Strength Index formed higher highs and was in an uptrend over the past few days. A move above 55 would be the first in over a month and a half, something that would indicate a strengthening trend. The Aroon up was close to 100% as an uptrend was still active despite some selling pressure in the market. Even the Awesome Oscillator noted a series of green bars as bullish momentum was on the rise.
The aforementioned signs were certainly a positive with regards to UNI’s long-term trajectory and its 26th May swing of $30 would be under the bullish crosshair moving forward.
The current wave of selling pressure did not seem enough to deter Uniswap from a projected breakout above $21.5 in the coming days- an event that could trigger an even sharper comeback towards the $30-mark. However, the broader market was still in a sensitive position and traders must also be wary of another sell-off in case UNI’s loses out on its 20-SMA.
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