Compound (COMPUSD) Anticipates a Bearish Trend Continuation
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Price Analysis: COMPUSD Anticipated Bearish Breakout with Key Levels to Watch
In late May 2024, COMPUSD (Compound) formed a significant high, which set the stage for the current bearish trend. Since then, the price has been gradually declining, characterized by lower lows and lower highs as it targets the $40.20 support level. In early August, the price briefly breached this key support level, only to experience a swift bullish reaction immediately afterward. However, this bullish momentum found resistance at the $54.80 level, where COMPUSD struggled to break through, reinforcing the bearish outlook.
COMPUSD Key Levels
Demand Levels: $40.20, $32.30
Supply Levels: $54.80, $64.60
After the brief rally to $54.80 in August, COMPUSD has been forming a declining triangle pattern. This bearish continuation pattern suggests that the prevailing downtrend may persist, especially if it is confirmed by a breakout below the triangle’s lower boundary. This bearish sentiment is also supported by the daily Relative Strength Index (RSI), which shows declining momentum, further indicating a potential downtrend. Additionally, the daily Moving Average (MA) reflects a bearish pattern as the current price remains below this indicator, reinforcing the weakness in COMPUSD’s price.
On the 4-hour timeframe, we observe a closer view of this price action. Here, COMPUSD has experienced a bearish break of structure, triggering a 4-hour order block, signaling continued bearish movement. The 4-hour MA also shows a bearish signal with the price trading below the indicator. This alignment between the daily and 4-hour timeframes emphasizes the strength of the bearish trend.
Market Expectation
The alignment of bearish indicators on both the daily and 4-hour timeframes points toward a potential Bearish breakout. Should this breakout occur below the $40.20 support level, it could act as a catalyst, accelerating the bearish trend and potentially confirming the downtrend. If the price breaks below $40.20, traders may anticipate an increase in selling pressure, pushing COMPUSD into a deeper bearish phase.
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