Can COMP Sustain Its Breakout? | Credit: Derek Fenech
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Key Takeaways
Compound (COMP) validated the $85 horizontal area as support.
The price could be trading inside a short-term symmetrical triangle.
Will the Compound price break out, and what’s next if it does?
COMP has increased rapidly since the start of November, culminating with a high of $144 on Dec. 4. The price fell afterward, declining by 43% before bouncing and regaining most of its losses.
Compound created a lower high after the bounce and could be trading inside a symmetrical triangle. Will COMP break out, and what’s next if it does? Let’s find out.
The weekly time frame COMP chart shows that the price has increased alongside an ascending support trend line since June. More recently, it validated it in November (white icon) and accelerated its rate of increase.
Since then, COMP has created four successive bullish weekly candlesticks, culminating in a new yearly high of $144, the highest price in nearly two years.
This week, COMP validated the $85 horizontal area with a long lower wick (white icon). The next horizontal resistance is $240, 120% above the current price.
Technical indicators support the upward movement. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are increasing and above their bullish thresholds.
So, the weekly chart suggests the COMP price will increase toward the next resistance at $240.
Will COMP’s Increase Continue?
The daily time frame chart aligns with the weekly one, suggesting the upward movement will continue. The wave count suggests that COMP has completed wave four in a five-wave upward movement (black) by retesting the $85 resistance area.
While wave four is short duration-wise relative to wave two, it has already reached the 0.618 Fibonacci retracement resistance level, making it possible that wave four has ended.
If the COMP price consolidates more before breaking out, it could create a symmetrical triangle. The bottom will have been reached even in this possibility, though wave four will continue.
If wave five has 0.618 times the length of waves one and three combined, the price will reach a high of $241, aligning with the previously outlined long-term horizontal resistance area.
Even though the RSI is falling, it is above 50 and has generated a hidden bullish divergence (green). These are both signs that the upward movement will continue.
COMP Price to $210
The COMP price broke out from a long-term horizontal resistance area and validated it as support.
Long- and short-term readings suggest the correction is over, and COMP could increase to $210.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
