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COMP Signals Resumption of Bullish Trend

2 mins
Updated by Kyle Baird
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In Brief

  • COMP has created a double-bottom pattern.
  • There is support and resistance at $145 and $215, respectively.
  • The price has possibly begun a bullish impulse.
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The Compound (COMP) price has created a bullish reversal pattern inside a significant support area and is expected to continue moving upwards.
The COMP price has been decreasing since Sept 1, when it reached briefly hit a high of $272.61. On Sept 18, it had bounced at the $145 support area, which is the 0.786 fib level of the preceding upward move.

COMP Hits Double-Bottom

Inside the support area, COMP has seemingly completed a double-bottom, which is normally considered a bullish reversal pattern. The pattern has been combined with lower wicks in both bottoms, a sign of buying pressure.
COMP Double Bottom
COMP Chart By TradingView

Possible Reversal

In the daily time-frame, technical indicators do not show any signs of reversal in the form of bullish divergences or bullish crosses. On the contrary, the successive lower closes are a sign of bearishness.
COMP Bullish indicators
COMP Chart By TradingView
However, the two-hour chart shows that the double-bottom was combined with significant bullish divergence in the RSI and that the MACD has moved upwards and crossed into positive territory. Furthermore, the price has reclaimed the previous support area at $160, which was expected to as resistance but broke through without much trouble. Now, the same area is expected to act as support once more.
COMP Short-Term
COMP Chart By TradingView

Wave Count

Cryptocurrency trader @theTradingHubb outlined a COMP chart that predicts the price retracing in the short-term before eventually resuming its upward movement towards new all-time highs.
COMP Price Movement
Source: Twitter
Beginning on Sept 6, COMP has possibly completed five waves up inside a leading diagonal (in brown below) and then an ensuing A-B-C correction. If so, the movement outlined in green below shows the beginning of the new upward trend. In this formation, the ratio of waves A:C is 1:1.61, very common in such corrections, giving credence to the possibility of this being the correct count.
COMP Short-Term Count
COMP Chart By TradingView
If this scenario plays true, the movement outlined above is the first sub-wave (in green) of the third longer-term wave (in black), which is expected to take the price to new all-time highs. Once the price begins moving upwards, the main resistance level will likely be found between $208-$223, the 0.5-0.618 Fib levels of the entire downward move.
COMP Long-Term Count
COMP Chart By TradingView
To conclude, it is likely that COMP is in the first stages of an upward trend that is expected to take the price towards new all-time highs. For BeInCrypto’s latest Bitcoin (BTC) analysis, click here!
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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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