Uniswap's native token, UNI, finds itself at a pivotal moment following a significant price correction. After a strong rally earlier this month, UNI has retreated to a critical support level, leaving investors and traders to weigh its immediate future amidst a landscape of mixed technical signals.
UNI's Post-Rally Standstill
Having surged past $10.3 on the back of positive proposals, Uniswap's UNI token recently fulfilled prior technical predictions by retracing towards the $5.92 support level. This crucial juncture sees UNI battling to hold this floor, which is vital for maintaining any lingering bullish momentum. While the daily timeframe still exhibits a long-term bullish bias, stemming from an earlier breach of the $8.6 swing high, the short-term picture presents a more complex narrative.
Bearish Pressures and Conflicting Indicators
Despite some signs of renewed buying pressure on the 4-hour MFI, the broader technical landscape in the lower timeframes suggests a dominant bearish trend. The Commodity Channel Index (CMF) has consistently shown significant capital outflow from UNI since mid-November, reinforcing a bearish H4 price structure that has held for over a week. Further exacerbating the cautious outlook, Open Interest has remained flat, and occasional negative funding rates indicate that short-position holders are being paid, signaling a pervasive bearish sentiment across the market.
The Path Ahead: Recovery or Deeper Correction?
UNI now stands at a crucial crossroads. A move above $6.55 would be the first tangible sign of recovery, potentially inviting lower timeframe traders back into the market. However, the more likely scenario, based on current evidence, points to a continued bearish trajectory should UNI fail to defend the $5.92 support. A drop below this critical level would confirm further downside potential, solidifying the recent correction into a more prolonged decline for the token.
