Compound Experiences Bearish Breakout From Symmetrical Triangle
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Market Analysis – Price Strikes Major Resistance Zone
Compound has just experienced a bearish breakout from a symmetrical triangle on the daily chart. Prior to the breakout, the Hull butterfly indicator signalled a price decline with its red hue. Compound (COMPUSD) has been locked in an enduring struggle with resistance levels, particularly evident around the $74.460 threshold, spanning nearly two years. Despite concerted efforts, the price has found it challenging to breach this pivotal barrier, with indications of resistance dating back to May 2022.
Compound Key Levels
Demand Levels: $106.000 $87.540, $74.460
Supply Levels: $30.270, $26.000, $25.000
The demand zone at $30.270 has emerged as a stalwart bastion against further price depreciation. With each interaction, this level has spurred bullish reversals, contributing to a sustained period of price consolidation within the confines of $74.470 and $30.270.
However, March brought a paradigm shift as bullish sentiment surged amidst the crypto community. The subsequent formation of a symmetrical triangle following the March ascent above $74.470 signaled heightened market volatility, culminating in a bearish breakout that breached the supporting trendline on the daily chart.
Prior to the formation of the Symmetrical triangle, Compound’s price propelled above the resistance zone at $74.400. Nonetheless, this bullish fervor was short-lived, as the price encountered immediate resistance at $97.540, precipitating a swift downturn.
The subsequent formation of a symmetrical triangle following the March ascent signaled heightened market volatility, culminating in a bearish breakout that breached the supporting trendline on the daily chart.
Market Expectation
Looking forward, market sentiment remains cautiously optimistic, despite indications of a downward trend from the Hull Butterfly Indicator. While recent bullish activity has injected optimism, there is speculation regarding a potential pullback phase, with market participants eyeing a selloff targeting the last swing low of $43.000.
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