Compound (COMP) has broken down from the $150 area and validated it as resistance. Until the area is reclaimed, the short-term trend cannot be considered bullish.
COMP has been falling underneath a descending resistance line since reaching an all-time high price of $911 on May 12.
On Feb 24, the price reached a low of $93.3 and bounced, breaking out from the descending resistance line two days later.
However, despite the breakout, the price has failed to initiate an upward movement and is still trading close to its Feb lows. The main resistance area is at $105, created by previous support that had been in place since June 2021.
Measuring from the all-time high, COMP has so far decreased by 85%.
COMP Breaks out
The daily time frame price action is bearish. It shows that COMP has deviated above the $150 resistance area (red circle) before validating it as resistance on April 14.
Technical indicators, however, provide mixed readings.
On the bullish side, the upward movement was preceded by bullish divergences in both the RSI and MACD (green lines). However, the indicators have been moving downwards over the past week. Furthermore, the RSI is right at the 50 line while the MACD is at 0.
Therefore, a continued decrease would take them into negative territory.
Short-term movement
Technical analyst @canozsuerx tweeted a chart of COMP, stating that a decrease towards $130 is expected prior to the continuation of the upward movement.
Since the tweet, COMP has reached the $130 level and bounced. The bounce also coincided with the 0.618 Fib retracement support level and the support line of a descending parallel channel.
So, while a breakout from the short-term channel could occur, the trend cannot be considered bullish until COMP reclaimed the $150 area, which is now acting as resistance once more.
For Be[in]Crypto’s latest Bitcoin (BTC) analysis, click here
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
