Compound (COMPUSD) Retraces Downward Following Resistance Invalidation
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COMPUSD Analysis: The Market Retraces Downward After An Invalidation Of The Diagonal Resistance
COMPUSD retraces downward after an invalidation of a diagonal resistance. Following the upsurge in June 2023, the market expanded rapidly into the premium zone. The expansion ended its first phase with a ‘head and shoulders’ pattern, which signaled an impending decline. The COMP/USD market remains within the six-month trading range as the bulls and the bears struggle to seize market control.
COMPUSD Significant Zones
Demand Zones: $35.40, $23.20
Supply Zones: $56.70, $86.00
In June 2023, there was a significant increase in buying pressure from the $23.20 demand zone, which caused the bears to leave the market. This led to a massive upsurge that cleared the previous high and reached the premium zone. Before this, COMPUSD was in a downtrend that was caused by diagonal resistance. This resistance emerged after the price failed to overcome the $56.70 resistance in February 2023. However, the downtrend reversed after reaching the $23.20 demand zone.
On the fifteenth day after the bounce off the $23.20 demand zone, COMPUSD invalidated the diagonal resistance at a go without making a return to it. Following the formation completion of the ‘head and shoulders’ pattern in August 2023, COMPUSD crashed massively to the downside. The market trading range over the last six months is within the $23.20 and $86.00 price levels. However, since August 7, 2023, the Compound price has remained within the $56.70 resistance and the $35.40 support. This happens as a result of the bulls’ and bears’ struggle to take control of the market.
Market Expectation
The breakout from the diagonal resistance changed the market’s environment on the four-hour chart to an uptrend. Following the formation of the $50.60 high, COMPUSD declined into the discount zone. The uptrend is expected to resume after the price reaches the 0.62 Fibonacci retracement level.
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