UNI’s downtrend could last longer as the key support level is breaking thanks to the slippage over the past few days that the altcoin received. There’s no end in sight to the ongoing drop so let’s read more about it in the latest altcoin news today.
The strength of the selloff was intense and struck a major blow to both investors and market structure. Many of the analysts noted that the cryptocurrency is at risk of seeing major downsides in the upcoming days and weeks which could come regardless of how the market trend shifts. If UNI’s downtrend is independent of the rest of the market, it could further perpetuate the weakness which was experiencing as a result of the unrelenting selloff.
While explaining where the cryptocurrency could trade next, one trader observed that it is resting on a critical support level which has been a strong level previously. He doesn’t expect it to continue in the near-term but he believes that a serious selloff could happen due to it forming what seems to be a massive distribution pattern. Unless the DeFi sector starts pushing higher in the upcoming days, there’s a strong chance that the tokens seen as index bets on the sector will continue getting hit hard.
At the time of writing, Uniswap’s governance token called UNI traded down by 5% with a price of $3.54. The cryptocurrency was sliding lower in the past few days and weeks as buyers were not able to garner the intense selling pressure that it was facing. The downtrend initially started when it peaked at highs of $8.50 in the week after the launch. The uptrend was the result of a huge hype and “fomo” that dissipated quickly, leading the trail of losses behind. Because a lot of people received their UNI tokens via airdrop, they could choose to sell as the price slides lower in order to take the free money off the table.
One trader noted that the distribution pattern is playing out for the Uniswap token which could mean that a huge downside is upcoming. He also noted that a drop below $3.50 could catalyze an even bigger decline:
“Sadly this still looks like massive distribution. Lose $3.5 and it’s going a lot lower.”
Unless the DeFi sector rebounds, Uniswap’s UNI token could soon see further lows.
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