Why could UNI grow 35%?

• The uniswap price is tight between the boundaries of an ascending triangle; a breakout signals a bullish move forward.
• On-chain data shows an optimistic bias as UNI’s exchange flow balance is negative and exchange supply is falling.
• A daily candle close below $5.54 would invalidate the bullish thesis.

Uniswap (UNI) price is trading in an ascending triangle pattern; a breakout signals a rally ahead. This bullish move is further supported by UNI’s on-chain data, which shows a negative exchange flow balance and a decrease in exchange supply, pointing to a rally ahead.

Uniswap price seems to resolve the ascending triangle to the upside

Uniswap price has produced two higher lows and three roughly equal highs since August 2nd. Connecting these swing points using a trendline reveals the formation of an ascending triangle on the daily chart. This technical pattern has an uptrend and the target is generally obtained by measuring the distance between the first swing high and the first swing low to the breakout point. At time of writing on Thursday, it is trading 1.75% higher inside the ascending triangle at $6.86.

Assuming the breakout occurs by closing a daily candlestick above the weekly resistance at $7.06, adding the 35% measurement to the potential breakout level of $7.06 reveals a target of $9.38. Investors should be wary of this theoretical move as they could face a slowdown at Uniswap’s daily resistance level of $8.19 and take some profits at $8.19. However, as the Relative Strength Index (RSI) and Extraordinary Oscillator (AO) indicators on the daily chart are firmly above their respective neutral levels of 50 and zero, the possibility of a slowdown above is unlikely.

UNI/USDT daily chart

Santiment’s exchange flow balance shows the net movement of Uniswap tokens into and out of exchange wallets. A positive spike indicates that more tokens have entered than exited, suggesting selling pressure from investors. Conversely, a negative value indicates more tokens have left the exchange than entered, indicating less selling pressure from investors and holders accumulating the asset.

In the case of UNI, this measure fell from 12,250 to -1.85 million from September 4 to September 5 and from 7,015 to -1.05 million from Sunday to Monday. This negative change indicates increased buying activity among investors.

During this event, Uniswap’s exchange supply fell by 4.7%. This is an optimistic development as holders are taking UNI out of exchanges and keeping it in cold wallets, further denoting investor confidence in Uniswap.

Uniswap Exchange Flow Balance and Supply on Graphic Chart

Despite the bullish thesis signaled by both on-chain data and technical analysis, if UNI breaks the uptrend line of the triangle and closes below $5.54, the outlook would change to bearish. This scenario could lead to a 16% crash to $4.70, a daily low since August 5.