Uniswap (UNI) may reach $8.70 target if buying momentum continues

As of January 29, Uniswap (UNI) is trading at $4.83. The chart is displaying the formation of a falling wedge pattern. The squeeze on the price and the reduced volatility point towards a market that is setting up, rather than continuing. The pattern is formed after a fall, and the numbers point towards a bullish reversal, but this only happens after the breakout, not before.

According to crypto analyst Jonathan Carter, the price range of $4.70 to $4.85 is a strong support level, as it is also the lower boundary of the lower wedge and a previous demand area. However, the price is still below the dynamic resistance level, which is the price at the SMA50 ($5.30).

Resistance on the upside is $5.30-$5.60, then major supply at $8.50-$9.00, which is a zone of heavy volume and breakdown. Contraction in volume is supportive of the wedge theory, but the breakout volume is still missing. A close below $4.50 on the 12H chart would invalidate the idea, and a close below $3.80-$4.00.

Also Read: Uniswap Whales Accumulate 12.4 Million UNI as Price Holds Near $5

Weekly Indicators Show Bearish Momentum Slowing

On the weekly chart, the Relative Strength Index (RSI) is trading close to the 37 mark, which is lower than the neutral level of 50. This indicates that the selling pressure is declining, but there is no sign of a reversal. According to historical patterns, the Relative Strength Index nearing the 30-35 mark is said to be associated with accumulation and increased demand.

The MACD is still in the red for the week, and the MACD line is below the signal line, with the histogram in the red. This indicates that the bear trend is still in place, as the TradingView chart is showing us. As for the signs that could indicate a possible trend reversal, traders can look for a bullish crossover and a positive histogram.

Approval Could Boost UNI Professional Holdings

The interest of institutions in UNI also appears to be increasing, as evidenced by the registration of the “Bitwise Uniswap ETF” entity in the state of Delaware by Bitwise. This is despite the uncertainty of SEC approval for the federal exchange-traded fund with regard to UNI.

If approved, UNI could become a core holding in professional portfolios,  pushing DeFi assets into the broader space. Bitwise’s filing is similar to previous attempts with ETFs.

The firm is at the intersection of traditional finance and DeFi. The registration is a vote of confidence from institutions in UNI and the broader DeFi space.

Why This Matters

UNI is currently in a falling wedge, which indicates that a breakout could be around the corner, and traders can get some strategic entry points as the price approaches the important support level at $4.70 to $4.83.

The Uniswap ETF registration by Bitwise indicates that there is increased institutional interest in UNI and DeFi assets in general.

Also Read: Uniswap Passes Unification Proposal, Approves 100 Million UNI Burn