Uniswap’s price printed a nice green candle following the announcement of its new Layer-2 network, Unichain.
Price surge
After launching Unichain, the price of UNI jumped big time, leading to increased buying activity.
The Relative Strength Index reached 80, a quite big rise from previous levels.
An RSI above 70 usually indicates that an asset is overbought, which means it could be overpriced in the short term, aka decline may coming.
Because of this, some investors might decide to take their profits, which could indeed lead to a decrease in price.
Anothe popular indicator, the Average Directional Index also increased from lower levels to 28.
While this shows some moderate strength in the trend, it remains below levels seen during stronger upside movements.
A higher ADX typically suggests a more powerful trend, but at this point, the current trend lacks the strength needed to indicate a continued rise.
Let the bulls charge
The Exponential Moving Averages for UNI show a bullish pattern, with short-term averages above long-term ones.
This often signals a positive price trend. Yet, as showed by the ADX, the momentum isn’t strong enough to guarantee ongoing growth, but if this trend continues, UNI might reach higher resistance levels.
On the other hand, if excitement around Unichain fades, the price could drop back to lower support levels.
Volatility is the traders’ best friend
Traders should keep an eye on price changes since the recent spike may encounter resistance, leading to short-term fluctuations.
While there is potential for further increases, caution is advised as technical indicators suggest that this rally might not last without stronger backing.
The future price of UNI will likely depend on whether investors view Unichain’s launch as a long-term benefit or just a temporary boost.
If buying interest slows down, it could lead to a drop back to earlier support levels, indicating a cooling off after this recent jump.
