Uniswap’s UNI token has seen a serious selloff throughout the past few hours, causing its price to revisit a crucial support level that previously stopped it from seeing any significant downside.
The cryptocurrency is now just a hair away from its lows of $3.50 that were set following its rally to highs of $8.50.
The intensity of the decline it has seen since peaking has come about due to a combination of fading hype, weakness across the aggregated market, and a lack of imminent catalysts to boost its price higher.
Many investors are waiting for more insights into when Uniswap V3 will be released, or until a proposal is passed that distributes trading fees to users.
That being said, one analyst is now looking for UNI’s price to “continue south” in the near-term before it is able to find any sustainable upwards momentum.
He notes that it could be quite some time before it is able to confirm a long-term bottom, with its price action being largely determined by the aggregated market.
Uniswap’s UNI Sees Dwindling Strength as It Remains Below $4.00
At the time of writing, Uniswap’s governance token is trading down just under 6% at its current price of $3.69.
This marks a notable decline from its daily highs of $4.10 that were tapped for a brief moment earlier today.
The rejection at this level does seem to have confirmed it as resistance. If it continues trading well below this level, it could be positioned to see further downside.
UNI’s price closely tracks the overall DeFi sector, which means that its fate may not be in its own hands until there are some external catalysts that help drive it higher.
Analyst: UNI Poised to Plunge Following Rejection at $4.10
One analyst explained in a recent tweet that he believes Uniswap’s UNI is positioned to see further downside in the days ahead as the entire market continues trending lower.
He notes that it could be quite some time before a clear bottom is formed, but does point to the $3.39 level as its next support.
“Uniswap: Couldn’t break that $4.10 area. Continuation south, just like the majority of the markets. Would be waiting for clear confirmation of bottom structure and/or trend reversal before taking heavy longs. Patience is key in trading.”
Image Courtesy of Crypto Michael. Chart from TradingView.
Where Uniswap’s token trends next will likely depend on the aggregated market until it can be driven by external catalysts.
Featured image from Unsplash. Charts from TradingView.
