Following the launch of Unichain, UNI price surged by more than 10%, pushing the RSI to overbought levels, suggesting a pullback.
UNI’s RSI reached 80, indicating overbought conditions, while its ADX was 28, reflecting moderate trend strength.
The EMA lines indicate a potential uptrend, but resistance levels and pullbacks may limit UNI’s short-term gains.
The price of Uniswap (UNI) has risen by more than 10% after Uniswap Labs announced the launch of its own Layer-2 Unichain. The price surge has pushed the relative strength index (RSI) to overbought levels, indicating strong buying momentum.
The rapid rise has brought caution to the market as overbought conditions could lead to a pullback. Key resistance and support levels will be crucial in determining UNI’s next price move.
UNI RSI indicates overbought conditions
UNI’s RSI is currently at 80, having surged sharply from 58 in just a few hours following the Unichain news. This rapid increase indicates strong buying momentum as investors reacted positively to the news.
The RSI, or Relative Strength Index, measures the speed and variance of price movements and is used to determine if an asset is overbought or oversold. It ranges from 0 to 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions.
UNI’s RSI is 80, which puts it in overbought territory, meaning the recent price surge could push the asset beyond its fair value in the short term. Overbought conditions typically mean a correction or pullback could be imminent as the buying frenzy cools.
Investors should remain cautious as prices may become more volatile and vulnerable to downside pressure once profit taking sets in. The current high RSI levels suggest that UNI’s rapid price rise may soon encounter resistance, which could lead to a short-term price correction.
Uniswap ADX shows moderate trend strength
UNI’s ADX is currently at 28, having risen from 19 a few hours ago. A rising ADX indicates that the strength of the current trend is increasing. The ADX or Average Directional Index is used to measure the strength of a trend regardless of its direction.
It ranges from 0 to 100, with values above 25 generally indicating a strong trend and values below 20 indicating a weak or non-existent trend.
Even with an ADX of 28, it is still below levels seen in previous months, when both uptrends and downtrends were stronger. Although UNI’s price has risen by more than 10% in just one day, the current ADX suggests that the trend may not be as strong.
This suggests that while there is some momentum, it has not yet reached a level that would allow for a sustained or particularly strong move. Traders should remain cautious as the current trend strength may not be enough to prevent a potential reversal or significant volatility in the near term.
UNI Price Prediction: EMA lines show potential uptrend
UNI’s EMAs are currently showing a clear uptrend, with the short-term line above the long-term line and a considerable distance between them. This configuration is usually bullish and indicates favorable near-term price action.
An EMA, or exponential moving average, is a type of moving average that places more weight on recent prices, making it more responsive to short-term movements. Traders use them to identify ongoing trends and potential reversals by observing the relationship between short-term and long-term moving averages.
However, as shown by the ADX, the current trend is not particularly strong despite the bullish EMA pattern. If the uptrend continues and strengthens, the price of UNI could test the resistance levels of $8.65 and $9.52. A breakout above these resistance levels could push the price to $12, which would be the highest level since June 2024.
On the other hand, if the latest news regarding Unichain is not enough to sustain the momentum and the trend reverses, UNI might test the support levels around $7.7 and $7.5 and potentially drop to $6. This would imply a potential drop of 28%.
