Uniswap price forms a rounded bottom setup on the daily time frame and is primed for a breakout. Analysts believe that UNI could go parabolic and hit $20, provided a few key signs are validated.
Let’s explore what needs to happen for Uniswap to hit $20.
Here’s Why UNI Price Could Go Parabolic And Hit $20
Uniswap price has been consolidating for the better part of the year, but the recent crypto market rally has given us glimpses of its high upside potential. In addition, it exploded on Tuesday, rising by over 15% to trade at $12.65 as of this writing. That has validated the belief that it could go all the way and hit $20.
On October 10, Uniswap Labs introduced Unichain, described as a Superchain that could revolutionize DeFi forever. Unichain is a Layer 2 chain on Ethereum, optimized to enhance DeFi transactions. Specifically, it enhances scalability, transaction speed and reduces transaction costs by approximately 95% compared to the Layer1 Ethereum blockchains. This has made its native token, UNI, a major asset in the DeFi ecosystem. The token powers Uniswap through utility in staking and validation and plays a key role in network governance.
In late May, the Uniswap Foundation postponed a vote on a proposal introducing the UNI fee switch indefinitely. However, with the current upbeat momentum in the crypto ecosystem, there have been speculations that The proposal could come up for a vote. If passed, it could be the most impactful implementation for Uniswap, as it would enable the distribution of a portion of DEX transaction fees and distribution of the same to UNI holders who have staked and delegated their tokens.
While the introduction of Unichain is a bullish development, let’s see what Uniswap price analysis has to say about the token’s immediate future.
Uniswap Price Analysis: Can UNI Hit $20?
A popular analyst, AmdTrades, recently made bold predictions for UNI price, with forecasts upwards of $25. According to the influencer, UNI’s value must produce a weekly candlestick close above $12 to trigger a decisive breakout. Such a development could attract sidelined buyers and propel Uniswap price toward the $20 territory.
The analysis is based on a long-term consolidation on the weekly timeframe, which has formed a rounded bottom. With the price above $12.06, it signals that the momentum is getting ready for a parabolic break outside the pattern, leading to a massive rally.
According to his analysis, the rally could go all the way to $29.37, with potential retracements at $23.52 and $17.52.
While the analyst’s outlook on Uniswap price is bullish, let’s take a look at on-chain metrics, which also hint at an optimistic future for UNI.
On-Chain Data Shows Key Level UNI Needs to Overcome
On-chain analysis data shows that UNI isn’t too far from breaking out outside the $12 territory. According to IntoTheBlock’s Gobal In/Out The Money (GIOM) indicator, roughly 8,000 addresses purchased nearly 390 million UNI at an average price of $12.76. These cohorts constitute the majority of holders. Hence, a move above $12.76 would put these 38.92% of holders in profit with little incentive to sell.
This outlook coincides with the analyst’s view of UNI producing a weekly candlestick close above $12.
Beyond this level, roughly 43.86k addresses that purchased nearly 138 million UNI at an average price of $25.42 are “out of the money.” If Uniswap price rises to this level, it would push these investors to sell and break even. Hence, there could be a large spike in selling pressure from $21.86 to $28.37, where these cohorts accumulated UNI. Interestingly, this aligns well with the AmdTrades’ target of $20.
In conclusion, Uniswap price looks primed to go all the way into the $20 territory. However, it is currently at a critical point whereby it needs to stay on the ascending trajectory to flip $12.76 into a support level. As it currently trades at $12.65, it is about 0.85% below that mark, which potentially ushers UNI into a period of increased volatility.
The post Here’s What Needs to Happen for Uniswap Price to Hit $20 appeared first on CoinGape.
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