- Uniswap rallied over 30% as Bitcoin reclaimed $100K.
- The $8 resistance could become sticky if the break-even holders unwind positions.
Uniswap [UNI] pumped 26% on the 8th of May as Bitcoin blasted above $100K for the first time in three months.
On the 9th of May, before the U.S. market opened, the DeFi token posted an extra 3% gain, bringing the overall recovery to 35% in the past 48 hours.
But can the rally extend into the weekend with a key obstacle at the $7.5-$8 zone?
UNI’s path forward
Source: UNI/USDT, TradingView
The Q1 dump eased around $5, the same level that stopped the August 2024 plunge. If last August’s recovery was to be repeated, the overhead hurdle at $8 (red zone) was the main immediate target.
So, bulls could still push for an extra 18-20% gain from the current $6.3 to $7.5-$8.0 level. In fact, the RSI was near the overbought territory, meaning reversal signs were yet to be flashed.
Besides, the Average True Range (ATR), which tracks volatility, was still low, suggesting that the rally may be far from over.
On the contrary, the bullish thesis will be invalidated if UNI slips below the 50-EMA (Exponential Moving Average) at $5.8.
Over 60% Uniswap holders at break-even
It’s worth noting that the overhead hurdle could be sticky due to two key factors. First, only 8% of UNI holders were at a profit at current value, but 61% of holders were at a break-even level.
In a worst-case scenario, investors at break-even could offload their stash to preserve their capital and stall the rally.
In fact, Santiment further showed that those who’ve held the token for the past 30 days had an average unrealized profit of 18%.
This could drive short-term holders to book a profit.
Source: Santiment
Taken together, the overhead of $8 could be a challenge for bulls, especially if BTC slips below $100K.
However, should the risk-on sentiment extend and BTC dominance dips to 60% or lower, UNI could eye $9.5 or the $10 psychological level.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
