Today, well-known crypto trader Ali Martinez drew attention to the possible future price movement of Compound (COMP). He revealed that COMP is likely to enter a bearish trend in the near future, based on a pattern that is currently emerging in its price.
According to the data shared on the X platform, Ali Martinez identified that Compound is currently forming a bearish pattern. The respected crypto analyst derived his analysis from COMP’s historical behavior, which seems to follow similar patterns.
According to Ali’s chart, at the time of his analysis, COMP was trading at $77.88. The pattern formation suggests that COMP is expected to experience a decline of 37%. This scenario is similar to the pattern observed in April 2024, when the crypto saw a slump of the same magnitude. This indicates that COMP is likely to face potential downward momentum, potentially leading to a fall to $49.07 in the near future.
Based on Ali’s chart, the current price movement indicates that COMP is forming a “head and shoulders” pattern. This technical indicator signifies a shift from a bullish trend to a bearish one.
Analysis shows that the pattern began to form after several unsuccessful attempts to reach $100 in late December and this month. With an 18% price drop in the last seven days, this formation is evident, as indicated by the right shoulder in Ali’s chart. The left shoulder is on the opposite side.
If the downward momentum continues, the price will drop below the neckline, which is a horizontal trendline connecting the two shoulders. This will confirm the bearish trend. Currently, the neckline support is at $69.0. A move below this level could result in a further drop, potentially bringing COMP prices down to around $49.07.
Compound price updates
The global cryptocurrency market is currently experiencing a significant cooldown due to a steady decline in the US stock market. This decline has caused a ripple effect, sparking fear among traders and leading to sell-offs across various investment instruments, including crypto.
Bitcoin is currently trading at $94,304.30, down 7.2% in the past week, indicating that traders continue to sell risky assets such as stocks and crypto.
COMP has come into focus due to its sluggish weekly performance. The altcoin has been down for most of last year. However, things changed towards the end of last year when the asset surpassed $100 for the first time since May 2022.
The asset has been steadily rising since the beginning of November, reaching a high of $144 on December 4. On December 13, it traded at a high of $110.15. The value then dropped as it entered a period of market consolidation.
Compound’s price movements have been influenced by recurring patterns that seem to be linked to events such as macroeconomic updates, the US presidential election, geopolitical shifts, and others.
In the past week, most cryptocurrencies have undergone corrections, which explains why COMP has been experiencing a sideways trend. However, a potential breakout moment may be on the horizon.