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UNI Mum as Uniswap V3 Announcement Leaves Bulls Wanting More

Key Uniswap Takeaways

  • Uniswap (UNI/USD) surged on Wednesday but lacked the momentum to turn the upside move into a price rally.
  • The move uphill appeared after the decentralized exchange unveiled a long-awaited network upgrade.
  • No hints on gas-solving layer-2 solution left bulls wanting more upside cues.

Uniswap climbed on Wednesday after the leading decentralized exchange team released details on its major upcoming protocol upgrade.

V3 Outlook

The latest published specifications showed that the “Uniswap V3” update would improve gas fee issues on the network. Uniswap consumes a majority of gas fees on the Ethereum network. Data fetched by ETH Gas Station shows that the exchanged charged $2 million worth of ETH for transactions in the past 30 days.

Uniswap’s new iteration aims to solve gas issues. However, the exchange won’t alleviate the problems until it launched its Layer 2 scaling solution, powered by a separate “Optimism” solution, which is also a part of the Uniswap v3 update.

The new revelations did not provide enough updates about when Uniswap would integrate Optimism into its protocol. But the exchange did state that it would introduce “concentrated liquidity,” a feature that would provide individual liquidity providers “granular control” over price areas for their allocated capital.

“Liquidity providers can provide liquidity with up to 4000x capital efficiency relative to Uniswap v2, earning higher returns on their capital,” the update read. “Even with these groundbreaking design improvements, the gas cost of v3 swaps on Ethereum mainnet is slightly cheaper than v2. Transactions made on the Optimism deployment will likely be significantly cheaper!”

UNI/USD Climbs Cautiously

The UNI/USD exchange rate jumped 1.48 percent to $31.47 after the Uniswap V3 announcement. Nevertheless, the pair’s volumes declined in the period of upside moves, showing a lack of bullish conviction among traders.

Uniswap, UNIUSD, UNIUSDT, UNIBTC, cryptocurrency, decentralized finance
Uniswap posts cautious gains after its v3 update. Source: UNIUSD on TradingView.com

Uniswap also faced downside pressure from its 50-4H simple moving average wave, which served as short-term resistance for the token. A break above the price ceiling posed the greater potential for UNI to reach the $35-36 price range as it attempts a full-fledged breakout out of its Ascending Triangle, a bullish continuation pattern.

Meanwhile, a failure to close above the 50-4HMA risked having Uniswap bears test the Triangle’s lower trendline for a downside breakout.

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Charted: Why Uniswap’s UNI Could Surge Above $35 and $40

Uniswap’s UNI is showing positive signs above $32.00 against the US Dollar. The price is likely to clear the $35.00 resistance and it could even rally towards the $40.00 level.

  • UNI is very stable above the $27.50 and $30.00 support levels against the US dollar.
  • The price is trading nicely above $32.00 and the 100 simple moving average (4-hours).
  • There is a key bullish trend line forming with support near $32.50 on the 4-hours chart of the UNI/USD pair (data source from Kraken).
  • The pair is likely to continue higher if it clears the $35.00 and $35.50 resistance levels in the near term.

Uniswap’s UNI Approaching Key Breakout

After a sharp downside correction towards the $27.50 support, UNI started a fresh increase. The last swing low was near $29.44 before the bulls pushed the price above the $30.00 resistance.

It broke the $31.00 and $32.00 resistance levels. There was a fresh test of the main $35.00 resistance. A high was formed near $35.13 before there was a minor decline. UNI dipped below the $33.50 level. There was a break below the 50% Fib retracement level of the upward move from the $29.44 low to $35.13 high.

Uniswap’s UNI

Source: UNIUSD on TradingView.com

It is now trading nicely above $32.00 and the 100 simple moving average (4-hours). The price is also stable above the 61.8% Fib retracement level of the upward move from the $29.44 low to $35.13 high.

Moreover, there is a key bullish trend line forming with support near $32.50 on the 4-hours chart of the UNI/USD pair. On the upside, the price is facing hurdles near $34.00. The main resistance is still near $35.00. A close above the $35.00 level could open the doors for a strong increase towards the $40.00 resistance zone.

Dips Supported?

If UNI price fails to climb above $34.00 or $35.00, it could correct lower. The first major support is near the $32.80 and $32.50 levels.

The main support is now forming near the $32.00 zone and the trend line. A downside break below the $32.00 support might open the doors for a push towards the $27.50 support. Any more losses may possibly lead the price towards the $27.50 zone.

Technical Indicators

4-Hours MACD – The MACD for UNI/USD is gaining momentum in the bullish zone.

4-Hours RSI (Relative Strength Index) – The RSI for UNI/USD is well above the 50 level.

Major Support Levels – $32.50, $32.00 and $30.00.

Major Resistance Levels – $34.00, $35.00 and $40.00.