Uniswap’s price [UNI] posted gains of 17.75% on Saturday, but it saw a 2.32% dip on Sunday. This was a strong performance, likely driven by the UNIfication proposal that sent UNI’s price above the $6-level.
This is a major governance proposal, and voting onchain, at the time of writing, had reached a quorum. The voting ends on 25 December, but its impact is already being felt on UNI’s price charts.
When voting opened at 3:50 UTC on 20 December, Uniswap was trading at $5.30. Since then, it has rallied by 16.27% to reach $6.16 at press time.
The UNIfication proposal’s approval would implement protocol fees across Uniswap v2 and some v3 liquidity pools, and these fees would be used to burn UNI.
Additionally, a retroactive burn of 100M UNI is also part of the proposal. This burn is intended to mimic the amount of tokens that would have been burnt had protocol fees been implemented since the token launch.
UNI’s strong rally is a sign of market confidence. Here’s how traders can look to handle the ongoing move.
Assessing Uniswap’s rally… and potential swing trading opportunities
Source: UNI/USDT on TradingView
A bullish structure was established once again with a daily session close above $5.97. The imbalance from $5.33-$6.05 (white box) could be retested as a demand zone before the rally continues.
The Awesome Oscillator was on the verge of making a bullish crossover, which would show that upward momentum was taking control. And yet, the OBV had not made new highs, unlike the price. This signaled a potential weakness in buying pressure.
Will UNI’s rally falter due to weak buying?
This can be considered the less likely scenario in the coming days. It is possible, based on the OBV indicator.
However, the price action is more important, and it suggested that a bullish structure may now be in place.
Traders’ call to action – Wait for this price dip before buying!
Source: CoinGlass
The liquidation heatmap revealed a cluster of liquidity around the $5.60-$5.86 region. UNI’s price may be pulled lower to sweep this magnetic zone before resuming a bullish trend.
Given the bullish 1-day structure, traders can wait for a dip towards $5.60-$5.80 before buying. Their bullish target would be $7, the next former support that was flipped to resistance during the retracement.
This setup would be invalidated by a drop below the imbalance at $5.33.
Final Thoughts
- The UNIfication proposal is set to go live and it spurred sizeable gains over the weekend.
- A minor price dip is likely on Monday, but if demand can step up, a UNI move to $7 and higher is possible.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
Source: https://ambcrypto.com/unis-price-breaks-6-level-after-burn-focused-governance-vote-gathers-steam/
