Uniswap shows a strong bearish outlook on shorter time frames
The confluence of demand areas and range lows on higher timeframes highlights a key area on the price chart
The daily chart of Uniswap [UNI] has been in an uptrend since the beginning of July. In August, bulls faced rejection at $6.7, marking a potential range for the token to trade in over the coming weeks.
Bitcoin [BTC] dropped from $29,600 on August 14 to $29,100 at press time. Although the drop was only 1.66%, it has severely affected the sentiment of the altcoin market. Uniswap has faced huge selling pressure in the past 24 hours.
The recent rapid decline suggests that range lows may not be defensible
UNI’s range (green) extends from $5.7 to $6.7. The $6.2 mid-range level sparked some conflict between buyers and sellers over the past week, but it wasn’t until August 15 that a winner emerged.
Strong selling pressure forced UNI to drop sharply below the $6.2 and $6 levels. As of writing, UNI is trading at $5.84, which is within a bullish order range on the daily timeframe. This demand area also converges with the range low.
Therefore, this would be an ideal spot if a reversal were to occur. However, as the volume surged, OBV jumped below the short-term support level. If BTC continues to fall, UNI will most likely drop to the next support area at $5.2. A break below $5.7 and a retest could offer a shorting opportunity.
Spot CVD begins to reverse uptrend as bearish sentiment grows
Spot CVD was in a healthy uptrend over the past week. But a shift in sentiment over the past two days means bears are back in control. The sharp price drop was accompanied by a decline in open interest. It also saw a large number of long liquidations.
This shows that long positions were forced to sell when the price hit the liquidation level. It is also accompanied by a decline in spot CVD, indicating that sellers are completely dominant in the short term.
