Uniswap consolidates ahead of a possible bullish move
- $7.5 is a pivotal level for Uniswap
- A move above should trigger more strength
- Bulls may target $14 if the price action holds above $5
Uniswap had a terrible 2022. It dropped like a rock.
But technical analysis suggests that a bottom might be in place. During the second half of 2022, Uniswap consolidated in what appears to be a contracting triangle.
The bullish breakout happened in 2023 when Uniswap rallied in the first two months together with the rest of the cryptocurrency market. As the price overcomes the upper edge of the contracting triangle, where will Uniswap go next?
A move above $7.5 pivotal area should trigger more strength
The cryptocurrency’s market rally in the first two months of 2023 is a relief to many crypto investors. Faith in the market succumbed to very low levels after the FTX saga as investors fled the market.
But buyers stepped in, as reflected by the Uniswap daily chart. For more than six months, the market had formed a contracting triangle that acted as a reversal pattern.
Now that the triangle broke to the upside during the 2023 rally, where can the price go?
Technical analysis suggests more strength ahead. While the $7.5 area offered strong resistance, a move above it is pivotal.
Therefore, bulls may want to place a buy-stop order at $8 with a stop at $5. The take-profit level should exceed the previous lower high belonging to the 2022 bearish trend. Also, it should exceed the longest segment of the triangular pattern. Hence, a take-profit order in the $14 area would make sense.
