Uniswap breaks inversion formation and heads for 37% growth: what's happening in the UNI market?

Uniswap breaks inversion formation and heads for 37% growth: what's happening in the UNI market?

New bullish signals confirmed by technical analysis give hope for a major reversal in one of the most important decentralized tokens - Uniswap (UNI). After a long-term decline and a several-month downtrend, this token now seems to be starting a new growth cycle, thanks to important technical signals and positive fundamental news.

Breakout of a key formation and investor confidence

A key technical moment has just taken place on the daily chart of UNI: the price has successfully broken the inverse head and shoulders formation, which is usually considered a strong signal of a trend reversal. This breakout was confirmed by a massive bullish candle, signalling the potential for longer-term growth.

In addition, a so-called golden cross formed on the chart, with the 20-day moving average crossing the 50-day, which is usually considered a signal of buying pressure and the beginning of a bullish trend. In addition, the MACD and RSI technical indicators point to growing momentum and strengthening demand.

Growing interest in the market

Thanks to these signals, UNI broke above key resistance and its market capitalization exceeded $5 billion, outpacing even the well-known Aave platform. Over the past 24 hours, the token has shot up more than 20%, reaching a high of $8.61 - an 84% increase from its April low.

Trading activity is also on the rise: daily trading volume is up more than 150% to nearly $1.39 billion, while open interest in the derivatives markets has reached a record $713 million, with a long/short ratio of over 1 - indicating that most traders expect prices to rise.

Technical targets and potential gains

According to an analysis of technical levels and Fibonacci retracements, a potential break above current levels could lead to further upside up to around USD 10.40, representing roughly 37% appreciation from current levels. This target also corresponds to the Fibonacci level of 24.7%, which increases its importance.

The current trend is also an important factor - UNI has bounced off lower highs and lows, and is now above key support at USD 8.20. If this support is maintained, the upward rally may continue.

What's behind the rise?

In addition to the technical signals, the fundamental news is also worth paying attention to. Uniswap has announced the introduction of a new smart wallet that is designed to simplify on-chain interaction by removing manual token approvals and bringing features such as gas abstraction. The move has the potential to increase user accessibility and activity on the platform.

Further, hopes for a clearer regulatory framework in the US have emerged in the market, with SEC chairman Paul Atkins hinting at the possibility of an "innovation exemption" for DeFi platforms. These reports have fuelled optimism and increased investor interest.

Support from the wider market and macroeconomic factors

The UNI rally is also being supported by a recovery in Bitcoin, which has climbed above the $110,000 mark on hopes of improved trade talks between the US and China. All these factors combine to create a favourable environment for the growth of decentralised finance.

Outlook and risks

Traders and analysts are watching the key support level at USD 8.20, which is an important turning point. If a break below this level occurs, there could be a short-term correction towards USD 7.50 or even USD 4.70, where further buying interest could occur.

Conversely, if bullish momentum maintains and price stays above key levels, UNI could see a rise of more than 37% from current levels, confirming its reversal and the start of a new growth cycle.

Conclusion

The Uniswap is on the cusp of a significant technical and fundamental turnaround. The breakout of the inverse head and shoulders formation and the formation of a golden cross give investors reason to be optimistic. If the current support can be maintained, the token can look forward to significant growth and strengthening its position in the decentralized stock market.

*This is not an investment recommendation.

Coingarage team