Compound (COMPUSD) Price Nears Critical Support
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Market Analysis: Compound Nears $43.00 Support Level
Compound descent has broken through the key level of 58.350 to the downside, marking a significant shift in market sentiment. The price action has taken the shape of a falling wedge, characteristic of a correction phase, and is now heading towards a new support level.
Compound Key Levels
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Demand levels: 43.000, 42.000, 40.000
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Supply Levels: 58.350, 98.180, 122.260
Compound experienced an impulsive phase from November to early December, characterized by a rapid price appreciation. During this phase, the price rallied from a support level of 43.030 to a resistance level of 122.260. However, a prominent rejection candle above the resistance level of 122.260 marked the end of the impulsive phase. The subsequent fall below the Smoothed Heikin Ashi candles confirmed the change in direction, while the change in hue to red further validated the bearish trend reversal.
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The correction phase kicked in immediately after the formation of the rejection candle above the resistance level of 122.250. The new bearish trend has become a falling wedge, characterized by a series of lower highs and lower lows. The price action within the wedge is rough and slower in delivery to the downside, typical of a correction phase.
Market Expectation
Market ExpectationThe price has tested the demand level of 43.030 with only a wick, indicating a brief moment of support. However, the price pulled back afterwards to the resistance level of 58.350, suggesting that the bears are still in control. Given the current market sentiment, the price dip is expected to reach 43.030 again, potentially leading to a breakdown of this critical support level. A close below this level could exacerbate the downward trend, while a rejection could lead to a bounce, potentially reversing the current bearish trend.
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