Uniswap (UNI) broke below long-term support on Jan. 19 but has shown some bullish signs within a bullish pattern.

UNI is 83% below ATH

UNI has been down since May 1st when it just hit an all-time high of $45. Between May and December, it bounced off the $15 horizontal zone and attempted to start an upward move.

However, all was unsuccessful, and UNI broke under it on January 19, 2022 (red icon).

So far, it has hit a low of $7.51 on Feb. 22, down 83% from the all-time high.

The next support zone is $5. Previously, this level has not been reached since January 2021.

UNI/USDT 2-day chart | Source: TradingView

UNI creates a bullish pattern

The daily chart is more bullish as it shows UNI trading inside a descending wedge. The descending wedge is considered a bullish pattern, meaning that a break above it would be the most likely scenario.

Furthermore, both the MACD and the RSI produced very clear bullish divergences (green line). Such divergences often herald a bullish trend reversal. Therefore, combined with the wedge, this suggests that a UNI breakout is the most likely scenario.

In this case, the next resistance is at $19.50. This is the 0.5 Fib retracement resistance and horizontal resistance area.

UNI/USDT daily chart | Source: TradingView

Count waves

Trader @TheTradingHubb claims that UNI is locked in a corrective pattern, meaning a long-term uptrend is likely thereafter.

Source: Twitter

Possibly the move down from the all-time high is an ABC correction, where wave A:C has a ratio close to 1:0.618. The number of partial waves is plotted in black.

Wave C has evolved into a closing diagonal, recognizable by the shape of a descending wedge. Such patterns are usually followed by a strong breakout and an upward move.

Therefore, it supports indicators and price action from the daily time frame.

UNI/USDT daily chart | Source: TradingView

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions

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