UNI’s 80% July Gains Are In Danger After Bearish Pattern Emerges

UNI’s 80% July gains are in dangerous waters as a new bearish pattern emerged and risks another drop from the current levels in the bearish setup so let’s have a closer look today at our latest altcoin news.

Uniswap UNI looks ready to post its best monthly performance in more than a year as it rallied by 80% in July but the signs of an extended pullback in the near term are emerging. UNI’s 80% July gains are in danger of diminishing despite the coin having one of its best months ever, reaching $9 price range. Uniswap’s gains surfaced due to similar upside moves in the broader crypto market but they turned out to be huge because of the ongoing euphoria around the Merge event. The Ethereum blockchain’s potential transition from PoW to a PoS is September triggering a buying hysteria among the coins.

UNI may also have been drawing its gains from the fee switch proposal and specifically, the community governance system that oversees Uniswap discussed whether or not they should grant the holders the right to earn 0.5% commission from the 3% tradign fees while rewarding the rest for the liquidity providers. Looking from a technical perspective, UNI is heading lower after testing $20 as an interim resistance and eyes an extended pullback to the upper trendline of the prevailing rising wedge pattern.

The price would risk falling further if it lands back inside the trading range defined by the two ascending and converging trendlines. This is mainly beucase the rising wedges are bearish reversal patterns. They resolve after the price breaks below the low trendlines but in the meantime, the profit targets are often at length equal to the maximum distance between the upper and the lower trendline when measured from the breakdown point.

In other words, UNI’s price could fall to $4.50 or down 50% from the prices today if the pattern plays out. A bounce back or ahead of the upper trendline could have UNI retest $10 as an interim resistnace and in doing so, it can eye an extended upside move to the $11.50 and $17 range.

As recently reported, The governance vote can give UNI token holders a piece of the transaction fees on the exchange and there has already been a long debate in the Defi community about the small piece of code in Uniswap and it is called the fee switch and can also have massive implications for the protocol and the holders of UNI. Right now, it costs 0.3% to trade tokens on the exchange, and of that small percentage, the entire amount goes to liquditiy providers for the speciifc trade.