UNI → Uniswap Breakout to $16.75! Next Target $30.00!?Uniswap broke out of its nearly two-year trading range and hit resistance at $16.75! Now that Bitcoin and the crypto market have taken a pause, what is Uniswap's next move?
How do we trade this? 🤔
We must be cautious with our long bias in the crypto market. Bitcoin is at its all-time high, and the crypto market is burning red hot to the upside; this is not an ideal time to long because we're near critical resistance on both Bitcoin and Uniswap. The best course of action is to wait for a pullback and a sign of another leg up. This is technically the first leg up on the weekly chart and we're a decent distance from the trading range. The RSI is also at 85.00, a significant distance from the Moving Average; this supports a pullback.
Wait for at least a 30% pullback toward the nearest minor support line from April 2022. If we get a strong bull bar in that area, there's a long trade to be had that's reasonable. Long near the $11.50 price point setting a stop loss just below the trading range resistance (now support-side) at $6.75. This allows you to take 1:1 Risk/Reward profits below the current resistance at $16.27 where once hit, you can move your stop loss up to the entry price to lock in profits. The second half of your position can be swung to $25.75, beyond the current resistance and just before the next one at $30.00. If the second half of the position doesn't pan out, you already locked in profits with the first half.
💡 Trade Idea 💡
Long Entry: $11.50
🟥 Stop Loss: $6.75
✅ Take Profit #1: $16.27
✅ Take Profit #2: $25.75
⚖️ Risk/Reward Ratio: 1:3
🔑 Key Takeaways 🔑
1. Confirmed breakout at a 130% increase in price.
2. No pullback on the weekly candle and near resistance, wait to long.
3. Look for support at 30% pullback to the $11.50 area, wait for strong bull candle.
4. Take profits at 1:1 Risk/Reward then move stop loss up to entry price.
5. RSI is high at 85.00 and a great distance from the Moving Average, supports a pullback.
💰 Trading Tip 💰
Ascending Wedges signal an increased probability of a bear breakout. Combined with three pushes up in a bull trend and strong sell bars (candles with large wicks on their tops), creates conditions where a counter-trend trade is reasonable.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
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