- Uniswap price broke out of a descending parallel channel on October 1 but lacks momentum.
- A decisive close above $25.24 could signal the start of an uptrend.
- UNI will face $29.43 before hitting the $33.34 resistance barrier.
Uniswap price broke out of its consolidation phase on October 1 but showed no signs of moving. A bounce that pushes it past the immediate resistance level could trigger the start of an uptrend.
Uniswap price prepares for volatile move
Uniswap price set up three lower lows and lower highs since August 18. Connecting these swing points using trend lines results in the formation of a descending parallel channel. While a move above the channel’s upper barrier usually indicates a breakout and catalyzes a run-up, UNI seems to be facing a problem.
Since its breakout, Uniswap price has dropped 7%, slicing through the $25.24 support floor. Therefore, UNI needs to gather steam and produce a decisive close above this resistance level to signal the start of an uptrend.
Doing so will allow Uniswap price to embark on a 40% climb to $33.34. However, UNI will face stiff resistance around $29.43, which must be cleared for the bulls to reach their destination.
UNI/USDT 1-day chart
Firmly supporting the potential bullish outlook is Santiment’s Market Value to Realized Value (MVRV) model. This on-chain metric is used to determine the average profit/loss of investors that purchased UNI over the past year.
Currently, the 365-day MVRV is hovering at -1.21%, suggesting that short-term investors have already sold their holdings and that a sell-off at this stage is unlikely. Moreover, the negative territory is where long-term holders accumulate. Therefore, a potential surge in buying pressure could kick-start a new uptrend.
UNI 365-day MVRV chart
IntoTheBlock’s Global In/Out of the Money (GIOM) model supports the cautiously optimistic scenario. This model shows that roughly 31,700 addresses that previously purchased 244.64 million UNI at an average price of $27.29 are “Out of the Money” and are likely to sell if Uniswap price ever rises to this level.
Therefore, the buyers need to overcome this resistance level to have any chances of an upswing.
UNI GIOM chart
While things are not looking so good for Uniswap price, continuing this downswing could lead to a retest of the $20.62 support floor. A breakdown of this barrier will reveal a weakness among the buyers and knock UNI down to $18.
If the bulls fail to defend this level, it will invalidate the bullish thesis and likely knock UNI down to $14.01.
Read More: UNI bulls eye 40% upswing