Compound (COMPUSD) Extends Retracement Period
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Market Analysis: Bullish Retracement is Still in Progress
A noteworthy peak was established at the $81.20 level, in late February 2024. This led to a pronounced downturn, with Compound price encountering substantial resistance at the $45.50 level.
Compound Key Levels
Demand Levels: $45.50, $34.80
Supply Levels: $68.80, $81.20
The $45.50 threshold appears to have acted as a robust demand level, effectively cushioning the price from further declines and facilitating a gradual upward retracement. However, during this recovery phase, the emergence of a bearish flag pattern has been observed, typically considered a precursor to potential downward movement.
Concurrently, the daily Relative Strength Index (RSI) has reached the 70.0 threshold, which is commonly interpreted as an overbought condition. This confluence of the bearish flag pattern and the RSI reading lends credence to the anticipation of an impending price decline.
The 4-hour chart conspicuously displays a bullish trend, suggesting that there is still some upward momentum in the market. Further reinforcing this bullish outlook is the daily Moving Average, which also indicates a favorable upward trajectory. However, the bullish indications suggest a necessary pullback, which is anticipated to lose momentum upon reaching the daily order block.
Market Expectation
Bullish momentum is anticipated due to a clear bullish break of structure in the 4-hour timeframe. A short retracement is also expected before the price aims for the daily order block.
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