Uniswap is all set to kick off its rally thanks to these reasons

Uniswap price has set up a perfect bottom reversal suggesting a trend shift in favor of the bulls. This pattern comes at a time when BTC is consolidating, increasing the possibility of a bullish breakout.

In addition, the on-chain stats also support an optimistic outlook for the bottom reversal pattern.

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Uniswap price set a swing high at $9.38 on March 4 and crashed about 13% to create a swing low at $8.1. This move was followed by a quick 16% run-up costing around $9.38, cementing its role as a resistance barrier.

Failing to flip the hurdle, UNI returned to the $8.1 support level to create the second swing low, signaling the potential for a bottom reversal pattern. Since then, Uniswap price is up 16% and it is currently trying to break the USD 9.38 resistance level.

In total, the price action from March 4 to March 17 led to the formation of a W bottom. A decisive four o’clock candlestick close above this ceiling will signal a breakout and initiate a run.

The target for this setup is obtained by measuring the distance between the highest peak and the lowest valley and adding it to the breakout point. For Uniswap, the W-bottom technical formation is forecasting a 13% gain to $10.69 if it manages to bend the $9.38 hurdle to a support level.

In some cases, this rally could reach $11.85, bringing the total gain from 13% to 26%.

UNI Perpetual Futures | Source: Tradingview

While the technical outlook suggests a bullish outlook, the 30-day Market Value to Realized Value (MVRV) model adds credibility to the possibility of a bullish move from an on-chain perspective. This indicator is used to assess the average gain/loss of investors who have purchased UNI tokens in the past month.

A negative value of less than -10% indicates that short-term holders are at a loss and this is generally where long-term holders tend to accumulate. That is why a value of less than -10% is often referred to as an “opportunity zone”.

For Uniswap, the MVRV is up from -10.5% to 0.85%, suggesting holders are piling up. Given the historical data, UNI has reached a local high of about 11.38%, suggesting the 30-day MVRV has more room to move higher.

MVRV ratio | Source: Saniment

Interestingly, this rise will occur if the Uniswap price rises as it would make a profit for the underwater holders. Therefore, this on-chain index adds a tailwind to the technical outlook that predicts UNI is ready for a quick run-up.

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