Uniswap (United) looks set to post its best monthly performance in over a year, as it rebounded around 80% in July, but signs of a prolonged short-term pullback are emerging.
Uniswap price nearly doubled in July
UNI’s price is having one of its best months ever, hitting nearly $9 on July 30 from nearly $5 at the start of the month, the best returns since January 2021’s 250% price rise.
Merging FOMO and UNI’s “fee change” proposal
Uniswap’s gains mostly emerged due to similar upward moves in the broader crypto market. But they turned out to be relatively massive due to continued euphoria surrounding “fusion.”
Notably, the potential transition of the Ethereum blockchain from proof-of-work to proof-of-stake in September sparked buying hysteria among associated tokens.
$ETH movement taking with it the whole ecosystem.
—Luke Martin (@VentureCoinist) July 27, 2022
Additionally, UNI may also have gained from a so-called “fee change” proposal.
Specifically, the community governance system that oversees Uniswap discussed whether or not to grant UNI holders the right to earn a 0.5% commission on Uniswap’s 3% trading fee while rewarding the rest for liquidity providers.
if $united turn on the fee switch, this is an easy crypto top 10 coin
— moon (macro expert) (@MoonOverlord) July 29, 2022
UNI “rising wedge” still in play
From a technical standpoint, UNI is now heading lower after testing $20 as interim resistance.
He is now eyeing a prolonged pullback towards the upper trendline of his dominant “rising wedge” pattern – around $8.
However, its price is likely to fall even further if it breaks back into the pattern’s trading range, defined by two converging ascending trend lines.
This is mainly because rising wedges are bearish reversal patterns.
They resolve after the price breaks below their lower trend lines. During this time, their profit target is usually equal to the maximum distance between their upper and lower trend lines when measured from the breakout point.
In other words, UNI’s price could drop towards $4.50 by September, down 50% from today’s price if the trend continues.
Conversely, a bounce at or before testing the upper trendline of the rising wedge could cause UNI to retest $10 as interim resistance. By doing so, he could be looking at an extended bullish move towards the $11.50-$17 range.
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