UNISWAP → Failed to Break Out of Trading Range! Short Again!?
Uniswap failed for the 4th time in 19 months to break out of the Trading Range between $4.00 and $7.30. Are we primed for yet another short?
How do we trade this? 🤔
If you followed my last Uniswap analysis, there was a great 1:2 Risk/Reward short opportunity on the Daily chart:
The initial chart failed to play out and was premature to the rip just above the trading range resistance at $7.30. The price soared to $8.25 then fell back into the range for another failed breakout. The trade from that failed breakout was a success!
Now that we're back in the range, we need to wait for another sell opportunity to enter our short position. Zooming into the Daily candles, we need the price to pull back toward the trading range high around $6.90 and have another strong bear candle present itself:
We also need to ensure that the RSI stays above 50.00 and ends up below the moving average, giving us proper support of the price action analysis to enter our short trade.
Until then, it's best to wait on the sidelines for that setup.
💡 Trade Idea 💡
Short Entry: $6.85
🟥 Stop Loss: $8.55
✅ Take Profit: $5.150
⚖️ Risk/Reward Ratio: 1:1
🔑 Key Takeaways 🔑
1. Failed to Break out of Trading Range
2. Strong Bull Bar Closing Near its Low
3. Found Some Support at 30EMA
4. RSI at 54.00 on Moving Average
5. Watch Bitcoins Price Movements at $46,000.
💰 Trading Tip 💰
Trading Ranges are two-legged traps for both bulls and bears. When the price rises toward the trading range resistance in two legs, the bulls expect more but don't get it and drive the price down when their trades are exited. The same goes for the bears in the opposite direction. The probability of profit is higher when longing the bottom of a trading range and shorting the top. In the case of this Uniswap chart, this trading range started after a long bear run, so it's reasonable to have a bear bias and short the trading range until its broken successfully.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
How do we trade this? 🤔
If you followed my last Uniswap analysis, there was a great 1:2 Risk/Reward short opportunity on the Daily chart:
The initial chart failed to play out and was premature to the rip just above the trading range resistance at $7.30. The price soared to $8.25 then fell back into the range for another failed breakout. The trade from that failed breakout was a success!
Now that we're back in the range, we need to wait for another sell opportunity to enter our short position. Zooming into the Daily candles, we need the price to pull back toward the trading range high around $6.90 and have another strong bear candle present itself:
We also need to ensure that the RSI stays above 50.00 and ends up below the moving average, giving us proper support of the price action analysis to enter our short trade.
Until then, it's best to wait on the sidelines for that setup.
💡 Trade Idea 💡
Short Entry: $6.85
🟥 Stop Loss: $8.55
✅ Take Profit: $5.150
⚖️ Risk/Reward Ratio: 1:1
🔑 Key Takeaways 🔑
1. Failed to Break out of Trading Range
2. Strong Bull Bar Closing Near its Low
3. Found Some Support at 30EMA
4. RSI at 54.00 on Moving Average
5. Watch Bitcoins Price Movements at $46,000.
💰 Trading Tip 💰
Trading Ranges are two-legged traps for both bulls and bears. When the price rises toward the trading range resistance in two legs, the bulls expect more but don't get it and drive the price down when their trades are exited. The same goes for the bears in the opposite direction. The probability of profit is higher when longing the bottom of a trading range and shorting the top. In the case of this Uniswap chart, this trading range started after a long bear run, so it's reasonable to have a bear bias and short the trading range until its broken successfully.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
Like 👍 and comment if you found this analysis useful!
-Joe Dean
Trader Engineering Course
**Available Now at TraderEngineering.com**
Trader Engineering Course
**Available Now at TraderEngineering.com**
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.