Today, well-known crypto trader Ali Martinez drew attention to the potential 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 has identified that Compound is currently forming a bearish pattern. This analysis is based on COMP’s historical behavior, which seems to follow similar patterns.
Based on Ali’s chart, COMP is currently trading at $77.88 at the time of his analysis. The pattern formation suggests that COMP is expected to decline by 37%. This scenario is similar to the pattern observed in April 2024, when the crypto experienced a similar drop. This indicates that COMP is likely to face potential downward momentum, possibly leading to a fall to $49.07 in the near future.
Based on the current price movement highlighted in Ali’s chart, COMP is currently forming a “head and shoulders” pattern. This is a technical indicator that signifies a shift from a bullish trend to a bearish one.
The analysis reveals that the pattern began to form after several failed attempts to reach $100 in late December and this month. With an 18% drop in the last seven days, this formation is evident, as shown in 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 would confirm the bearish trend. Currently, the neckline support level is at $69.0. A move below this level could lead to a further drop, potentially causing COMP prices to reach around $49.07.
The global cryptocurrency market is currently experiencing a significant cooldown due to a steady decline in the US stock market. This decline has had a ripple effect, causing fear among traders and resulting in sell-offs across various investment instruments, including crypto.
Bitcoin is currently trading at $94,304.30, down 7.2% in the past seven days, indicating that traders are continuing to sell risky assets like stocks and crypto.
COMP has been in the spotlight due to its sluggish performance over the past week. The altcoin has been in a downtrend for most of last year. However, things changed late last year when its value surpassed $100 for the first time since May 2022.
The asset steadily rose 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, the prices of most cryptocurrencies have undergone corrections, explaining why COMP has been exhibiting a sideways trend. However, a potential breakout moment could be imminent in the near future.
