The price of Compound (COMP) has garnered significant attention due to the recent spike in liquidations within the cryptocurrency market. Notably, two consecutive bullish candles on the daily chart signal a robust upward momentum for COMP.
COMP Price Breaks Key Resistance
After hitting a low of $44, COMP began to recover, breaking through a downtrend line and the psychological barrier at $50. The recent bullish action has shattered this trend line, marking a crucial breakout for the cryptocurrency.
The price’s surge past the 50-day Exponential Moving Average (EMA) with an 11% increase and its return above the $50 level is a pivotal sign for sustained upward movement. Technical indicators suggest the rally might persist, as the Relative Strength Index (RSI) on the daily chart remains above 50, indicating bullish momentum. Despite a “death cross” between the 50-day and 200-day EMAs, the upward break of the 50-day EMA could hint at a new bullish phase, though the 200-day EMA still acts as a significant resistance.
Short-Term Prospects and Key Levels
Although short-term optimism in COMP’s price is high due to consecutive bullish candles, the overall trend remains mixed to bearish. The Doji candle emerging during this period suggests that bullish momentum might be waning. For a definitive trend reversal, COMP needs to break the 200-day EMA and the 23.60% Fibonacci level at $56.52. If these levels are surpassed, it could propel COMP to a target of $75.
Actionable Insights
Investors should consider the following:
- Monitor the 50-day and 200-day EMA levels closely for potential trend changes.
- Watch for a break above the $56.52 level, which could signal a stronger bullish phase.
- Be cautious of the Doji candle, which may indicate weakening bullish momentum.
In conclusion, while Compound (COMP) shows signs of recovery and potential for a bullish trend, investors should remain cautious and watch for critical levels and technical indicators to confirm sustained upward momentum.