Compound (COMPUSD) Begins Markdown As The Distribution Phase Ends
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COMPUSD: Price Begins Markdown As The Distribution Phase Ends
COMPUSD begins markdown as the distribution phase ends. Owing to the reaction of the price towards the daily bearish order block at the $63.80 supply zone, the price was distributed for about two months. The distribution phase has however ended as the bulls panic out of the market in favor of the bears.
COMPUSD Significant Zones
Demand Zones: $40.60, $29.90
Supply Zones: $63.80, $76.50
Before the distribution phase and the current markdown, an uptrend began two months ago due to the rejection at the $29.90 demand zone. According to the MA Cross, the market flipped bullish as the MA Period 18 crossed the MA Period 40 to the upside. As COMPUSD continued upward, buyers began to offload their positions with the $63.80 supply zone in view. At the Buying Climax, just above the Preliminary Supply, the buying power reached its climax as the bears began to find opportunity. Price made a short retracement to the downside to form the low at AR, which defined the lower boundary of the distribution phase.
Following the creation of the AR (automatic reaction), the price expanded upward for a second test and a higher high. The higher high invalidated the previous high at the BC as the price surged deeply into the daily bearish order block. Price again made a downward retracement to retest the lower boundary of the distribution phase. Following the retracement, COMPUSD made a final thrust into the daily bearish order block. After the formation of the upthrust, COMPUSD headed downward to break the boundary support, which led to the current markdown.
Market Expectation
The failure swing and the market structure shift (MSS) on the four-hour chart were caused by the reaction of COMPUSD towards the $63.80 supply zone. While the bearish move is likely to continue, a retracement into the order block at the $40.60 price level might occur first.
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