Compound (COMPUSD) Eyes Brief Recovery Before Bearish Continuation
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Price Analysis: COMPUSD Anticipates a Bullish Retracement
COMPUSD reversed from a bullish breakout into a strong downtrend, breaching $63.30 and potentially targeting $34.10 after a brief retracement. In November 2024, Compound experienced a bullish break of structure, signaling renewed buyer interest. However, the bullish momentum was short-lived as price action swiftly reversed, indicating a shift in market sentiment toward the downside.
COMP/USD Key Levels
Demand Levels: $63.30, $34.40
Supply Levels: $92.90, $121.80
Following the bullish breakout, COMPUSD advanced to the $121.80 level, where it formed a failed high pattern. This failure to sustain upward momentum marked the beginning of a bearish retracement. As selling pressure increased, the price entered a phase of consolidation, with market participants anticipating a continuation of the bullish trend. However, instead of an upward breakout, COMP/USD experienced a bearish breakdown, invalidating bullish expectations.
The bearish breakout drove the price below the critical $63.30 demand zone, leading to another bearish break of structure. This confirmed the dominance of sellers in the market, with further bearish confluence provided by the daily Moving Average, which signaled continued downside momentum.
While the 4-hour timeframe suggests the possibility of a temporary bullish pullback, this move is expected to be short-lived due to the prevailing bearish momentum observed on the daily chart. Any brief recovery is likely to provide better short-selling opportunities rather than indicating a trend reversal.
Market Expectation
Market Expectation Following the anticipated 4-hour bullish retracement, COMP/USD will resume its downtrend, breaching the $34.10 support level and potentially reaching lower price targets. Traders should monitor key resistance zones and the strength of any pullbacks to assess the continuation of bearish pressure.
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