Uniswap (UNI) market valuation could grow by 100% in the second half of 2022 as it paints a classic bearish reversal pattern.
Dubbed "inverse head and shoulders (IH&S)," the technical setup takes shape when the price forms three troughs in a row below a common support level (neckline), with the middle one (head) deeper than the other two (shoulders).
Additionally, it resolves after the price breaks above the support level.
The UNI price trend since May 23 checks all the boxes for forming an IH&S pattern, except the right shoulder. A retest of its neckline near $5.71 would form the right shoulder, increasing the possibility of an iH&S breakout scenario, as shown below.
As a rule of technical analysis, the price breaking out of an IH&S structure can rally by as much as the maximum distance between its head's lowest point and the neckline. So, UNI's IH&S's upside target comes to be around $9.78, up over 100% from June 2's price.
Uniswap's longer-timeframe charts bring attention to resistance levels that could keep UNI from touching their IH&S target.
That includes an interim resistance level of around $6 that has rejected UNI's price lower at least thrice since May. A successful break above the $6-level could have UNI face the February 2022 support of around $7.52 whose test preceded a 75% price rally to $12.48.23.
The $7.52-level also coincides with UNI's 20-week exponential moving average (20-week EMA; the green wave in the chart below), now near $7.90.
Conversely, a decisive pullback from the $6-resistance level could trigger a result in a bearish technical setup, dubbed as a "bear flag."
Related: Finance Redefined: Uniswap goes against the bearish trends, overtakes Ethereum
UNI has already been returning lower after testing levels around $6, which coincides with the flag's upper trendline. That leaves the UNI/USD pair two potential scenarios: decline toward the flag's lower trendline near $3.92, or rebound for a potential breakout above the upper trendline.
UNI's move toward $3.92 would risk triggering the bear flag breakdown scenario, meaning a 45%-plus decline to $2.75 when measured from June 2's price. On the other hand, a break above the upper trendline would invalidate the flag setup altogether.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
Wilfred Bonse, a politician, has been arrested for embezzling over 200 million naira from Patricia Technologies' crypto wallet, collaborating with hackers to launder funds. Despite setbacks, Patricia Technologies aims to repay customers after converting assets into Patricia Token, highlighting Nigeria's crypto awareness at 99%.
JixuThe Securities and Exchange Commission (SEC) of Thailand has implemented a trading and asset deposit halt for Zipmex, effective from 25 November, 1pm local time. This decision aligns with local regulations to ensure compliance. The suspension instructs customers seeking fund or asset withdrawals during this period to directly contact the exchange.
JoyGlobal collaboration strengthens AI security with comprehensive guidelines for development and deployment.
Hui XinTron, a fast-growing cryptocurrency network, has overtaken Bitcoin as a platform for crypto transfers associated with groups designated as terror organisations by Israel, the United States, and other countries.
JoyHTX, formerly Huobi, swiftly resumes operations, including Bitcoin transactions, after a $30 million exploit, as part of a series of security challenges in the Sun-linked crypto ecosystem.
Hui XinBinance's former CEO, Changpeng Zhao (CZ), faces travel restrictions in the U.S. as a judge rules to curb potential flight risks amidst legal proceedings.
Hui XinInferno Drainer's shutdown highlights challenges and opportunities in combating cryptocurrency fraud, leaving the community with a mix of relief and vigilance.
Hui XinRavi Menon, Managing Director of the Monetary Authority of Singapore, envisions a future with three main components: central bank digital currencies, tokenised bank liabilities, and "well-regulated" stablecoins.
BrianThe FSC will purportedly provide policy support, encouraging periodic capability evaluations for companies to enhance their anti-money laundering measures.
BrianOKX's entry into Brazil brings cutting-edge services and Web3 innovation, shaping the future of crypto trading in the region.
Hui Xin