The Uniswap (UNI) price has broken out from an important resistance area at $3.50 and validated it as support after.
As long as Uniswap Token is trading above this level, it is expected to continue moving upwards.
Uniswap Token Moves Above Resistance
The UNI price has been moving upwards since Nov. 5, when it reached an all-time low price of $1.75. On Nov. 12, UNI broke out above the $3.50 resistance area and has since validated it multiple times as a support level.
If UNI continues increasing, the next closest resistance area would be found at $5.30.
However, technical indicators provide a mixed outlook. While the RSI is steadily climbing above 50, the Stochastic oscillator has already made a bearish cross and is decreasing.
Future Movement
A look at the six-hour chart reveals that UNI is also following an ascending support line. When combining this with the minor $4.10 resistance area, UNI appears to be trading inside an ascending triangle.
A breakout that travels the entire height of the pattern would take the price to the previously mentioned $5.30 resistance area.
On the other hand, a breakdown could cause a drop to $2.80, the 0.618 Fib retracement level of the entire upward move. At the time of press, this scenario seems less likely.
UNI Wave Count
Cryptocurrency trader @CryptoTony_ outlined a UNI chart, stating that it has begun an extended third wave which is likely to take it above $5.
While the entire wave count from Nov. 5 is not entirely clear, the movement between Nov. 16-26 appears to be an irregular flat corrective structure. An impulsive move normally follows this pattern.
If true, UNI may have already begun its bullish impulse (shown in orange below) and completed wave 1 and possibly wave 2.
A potential target for this wave is found at $5.89, the 2.61 Fib extension of wave 1. A more accurate estimate will be formed once the price movement develops a bit more.
A decrease below the wave 1 low (red line) at $3.10 would invalidate this particular wave count and likely cause a drop towards the previously outlined $2.80 support area.
Conclusion
It’s likely that the Uniswap Token price breaks out above the current minor resistance area and gradually moves towards the next closest resistance at $5.30.
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