Uniswap's 80% gains in July are in danger with UNI price painting a classic bearish pattern
Uniswap (UNI) looks ready to post its best monthly performance in more than a year as it rallied approximately 80% in July, but signs of an extended pullback in the near term are emerging.
UNI's price is having one of its best months ever, reaching nearly $9 on July 30 versus nearly $5 at the beginning of the month, best returns since January 2021's 250% price rally.
Uniswap's gains primarily surfaced due to similar upside moves in a broader crypto market. But they turned out to be relatively massive due to an ongoing euphoria surrounding "the Merge."
Notably, the Ethereum blockchain's potential transition from proof-of-work to proof-of-stake in September has triggered a buying hysteria among related toke.
$ETH move bringing the entire ecoystem with it.Best movers: •Defi: $LDO $UNI $BIT $AAVE•Layer 2: $OP $MATICAnd of course because it's crypto $ETC is the biggest pump. pic.twitter.com/hN9Rd6Yr9j
Additionally, UNI may also have been drawing its gains from a so-called "fee switch" proposal.
Specifically, community governance system that oversees Uniswap has been discussing whether or not they should grant UNI holders the right to earn 0.5% commission from Uniswap's 3% trading fees while rewarding the rest for liquidity providers.
if $uni turns on the fee switch its an easy top 10 coin in crypto
From a technical's perspective, UNI is now heading lower after testing $20 as its interim resistance.
It now eyes an extended pullback toward the upper trendline of its prevailing "rising wedge" pattern—around $8.
However, its price would risk falling even further if it lands back inside the pattern's trading range, defined by two ascending, converging trendlines.
That is primarily because rising wedges are bearish reversal patterns.
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