Uniswap drops to historic $3 support — Assessing if UNI can hold it

Uniswap was approaching a weekly level that has been holding its price action since December 2020. The potential reaction from the zone has been backed by the accumulation of Smart Dex traders who have started buying UNI. The price action of Uniswap [UNI] was approaching a key weekly support level at $3, as of press time. This key support level has held price since December 2020 protecting against a drop below.

UNI has consistently shown a bullish reaction whenever it reaches this price level. Notable examples include recoveries in mid-2022, mid to late 2023, and Q4 of 2024, each occurring after touching this level.

Currently, the MACD indicator signals a bearish trend, with the MACD line at -0.596, the signal line at -0.503, and the histogram at -0.093. Since the MACD line is below the signal line, this suggests the possibility of a further decline, potentially toward the $3 level.

UNI Source: TradingView

If the price reaches the $3 support level and rises while the histogram narrows, this could signal potential bullish convergence. A double-bottom pattern at $3 in late 2024 previously triggered an upward breakout, leading to a bullish trend.

As long as the $3 support remains intact, a move higher can be anticipated based on past reactions at this level. However, a break below $3 would invalidate the support and indicate a shift toward a bearish trend.

Smart Dex traders accumulating UNI Looking at smart money accumulation for top tokens on Ethereum recently showed UNI registered a buy volume of $64.9K and no sell volume, reflecting a net volume of $64.9K.

The average buy price is $6.5 with the cumulative volume hitting $66.3K. This modest but consistent accumulation by astute money, as Uniswap moves towards a potential bullish reversal point at $3 suggested initial buy interests.