Uniswap analysis: UNI price can double based on a classic technical pattern
Uniswap (UNI) market valuation could grow by 100% in the second half of 2022 as it paints a classic bearish reversal pattern.
Dubbed "inverse head and shoulders (IH&S)," the technical setup takes shape when the price forms three troughs in a row below a common support level (neckline), with the middle one (head) deeper than the other two (shoulders).
Additionally, it resolves after the price breaks above the support level.
The UNI price trend since May 23 checks all the boxes for forming an IH&S pattern, except the right shoulder. A retest of its neckline near $5.71 would form the right shoulder, increasing the possibility of an iH&S breakout scenario, as shown below.
As a rule of technical analysis, the price breaking out of an IH&S structure can rally by as much as the maximum distance between its head's lowest point and the neckline. So, UNI's IH&S's upside target comes to be around $9.78, up over 100% from June 2's price.
Uniswap's longer-timeframe charts bring attention to resistance levels that could keep UNI from touching their IH&S target.
That includes an interim resistance level of around $6 that has rejected UNI's price lower at least thrice since May. A successful break above the $6-level could have UNI face the February 2022 support of around $7.52 whose test preceded a 75% price rally to $12.48.23.
The $7.52-level also coincides with UNI's 20-week exponential moving average (20-week EMA; the green wave in the chart below), now near $7.90.
Conversely, a decisive pullback from the $6-resistance level could trigger a result in a bearish technical setup, dubbed as a "bear flag."
Related: Finance Redefined: Uniswap goes against the bearish trends, overtakes Ethereum
UNI has already been returning lower after testing
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