Compound (COMPUSD) Retraces Following Significant Upside Breakout
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COMPUSD Analysis: Price Retraces After A Massive Breakout To The Upside
COMPUSD retraces after a massive breakout to the upside. The breakout happened after a long period of decline. After the breakout, the price expanded to the upside without a significant retracement until recently. Owing to the selling pressure at $63.80, the retracement reaching the demand zone is highly probable.
COMPUSD Significant Zones
Demand Zones: $35.60, $23.20
Supply Zones: $63.80, $93.40
The preceding market trend was a bearish one. The bearish trend began in February 2023 after a bounce off the $63.80 resistance. Until the breakout on June 25, 2023, the MACD (Moving Average Convergence Divergence) was below the zero line. During the downtrend, COMPUSD breached the $35.60 support level. At $35.60 support, the bulls’ effort to drive the price upward failed due to the continuous input of more sell orders. The battle between the bulls and the bears continued until they breached the $35.60 support.
Before the $35.60 support failed, COMPUSD consolidated in a triangle pattern. The triangle pattern was made up of both the diagonal resistance and the $35.60 support. Following the breach, the price of the Compound sank lower to hit the $23.20 demand zone. From the $23.20 demand zone, COMPUSD rose alongside the MACD indicator. The sudden rise from the $23.20 demand zone caused an upward breakout, which changed the market’s environment. The market’s trading range is now between $70.90 and $23.20. COMPUSD is likely to keep declining until reaching the oversold region.
Market Expectation
The market’s order flow is bearish on the four-hour chart. This is because of the recent market structure shift after the invalidation of the $60.80 short-term low. COMPUSD is expected to keep declining until reaching the discount zone.
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