Compound (COMPUSD) Anticipates a Bearish Trend
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Price Analysis: The Market Reverses the Bullish Trend as it Resumes the Ongoing Bearish Trend
COMPUSD has been exhibiting a pronounced bearish trend, as evidenced by the formation of a bearish head and shoulders pattern on the daily timeframe. This technical pattern provides a strong indication of the overall bearish sentiment in the market. Following the completion of the head and shoulders formation, the price decisively broke through the $42.10 demand level, signaling a potential continuation of the downward trend as it targets lower price levels.
COMPUSD Key Levels
Demand Levels: $42.10, $32.50
Supply Levels: $54.80, $68.80
As the price moved toward the critical $32.50 support level, a significant bullish retracement occurred, temporarily lifting the price back above the $42.10 mark. However, this recovery was short-lived, as the bullish momentum stalled around the $54.80 resistance level. At this point, the upward movement lost steam, and the bearish trend resumed.
The daily moving average (MA) further reinforces the bearish outlook, with the price positioned below the indicator, offering a clear bearish signal. This indicates that the overall market sentiment remains negative, favoring further downside movement.
On the 4-hour timeframe, there is additional confirmation of the market’s bearish bias. After the brief bullish retracement, the shorter timeframe illustrates a reversal of the temporary bullish trend, aligning with the broader bearish momentum observed on the daily chart. This confluence of signals across multiple timeframes strengthens the expectation of continued downward pressure.
Market Expectation
Given the market’s current structure, a breach of the $42.10 level is highly likely. Once this support is decisively broken, COMPUSD is expected to continue its downward trajectory, potentially targeting the next significant level around $32.50.
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