Decentralized finance token Uniswap is today’s top-performing digital asset, defying the broader market pullback with over 10% gains in the past 24 hours.
As most major cryptocurrencies consolidate, UNI has extended its recent rally, reaching a new four-month high and reigniting bullish momentum.
UNI Rallies 40% to Four-Month High
An assessment of the UNI/USD one-day chart shows that the altcoin surged 40% on June 10, closing at a four-month high of $8.66. Although it has since witnessed a brief pullback to trade at $8.38 at press time, UNI remains up 17% over the past day, with bullish momentum still building.
The sharp rise in the token’s funding rate supports this bullish trend. Per Coinglass, the metric currently stands at a monthly high of 0.013%, indicating heightened demand for long positions in the token’s perpetual futures markets.
The funding rate is a periodic fee between traders in perpetual futures markets to keep contract prices aligned with the spot market. When an asset’s funding rate is positive, long position holders are paying shorts, indicating bullish sentiment and higher demand for leveraged long trades.
Moreover, UNI’s Elder-Ray Index supports this bullish outlook. On the daily chart, the momentum indicator has posted the tallest green histogram bar in a month, reflecting the spike in buy-side pressure. As of this writing, UNI’s Elder-Ray Index is 3.01.
The indicator gauges the strength of bulls and bears in the market. When it prints green histogram bars, it indicates strong buyer dominance and rising upward momentum. This hints at the possibility of UNI’s continued rally in the short term.
Bullish Case for UNI Grows
With growing buying pressure, UNI could rally toward the $9.46 resistance level and flip it into a support floor. If this bullish breakout is successful, it may pave the way for a move toward $10.25, a price level last seen on February 17.
However, a resurgence in profit-taking could invalidate this outlook. Renewed selloffs may push UNI back down to $8.07, erasing much of its recent gains.
If this support fails to hold, the altcoin could face a steeper drop toward the $7.08 region.
Bitrue