Today, prominent crypto trader Ali Martinez attracted attention about Compound (COMP)’s potential future price movement. He disclosed that COMP is likely to experience a bearish trend soon, based on a pattern currently emerging in its price.
COMP forming a head and shoulders pattern
Based on the data shared on the X platform, Ali Martinez identified that Compound is currently forming a bearish pattern. The renowned crypto analyst derived his analysis based on COMP’s historical behavior, which appears to follow similar patterns.
According to Ali’s chart, COMP is currently trading at $77.88, at the time of his analysis. The pattern formation means that COMP is set to experience a decline of 37%. This scenario is similar to the pattern created in April 2024, which saw the crypto slump by the same margin. This means that COMP is likely to see a potential downward momentum that may lead it to experience a fall to $49.07 soon.
Based on the current price movement as highlighted by Ali’s chart, COMP is currently forming a “head and shoulders” pattern. This is a technical indicator showing a change from a bullish trend to a bearish one.
Analysis shows that the pattern started to form after several unsuccessful attempts to reach $100 later part of December and this month. With the current price drop of 18% in the last seven days, this formation is clear, as indicated in the right shoulder in Ali’s chart. The left shoulder is on the other side.
If the downturn momentum continues, the price will drop below the neckline (a horizontal trendline linking the two shoulders), and as a result, the bearish trend will be confirmed. Currently, the neckline support stands at $69.0. A move below this level could lead to a further drop, potentially bringing COMP prices down to around $49.07.
Compound price updates
The global cryptocurrency market is currently witnessing a substantial cooldown because of a steady decline in the US stock market. This decline has caused a ripple effect, igniting fear among traders and influencing sell-offs across multiple investment instruments, including crypto.
Bitcoin is currently trading at $94,304.30, down 7.2% in the past seven days, highlighting that traders continue to sell risky assets like stocks and crypto.
COMP is on the spot because of its sluggish weekly performance. The altcoin has been down for the larger part of last year. But things changed in late last year when the asset rose above $100 for the first time since May 2022.
The asset rose steadily since the beginning of November, which led to a climb to a high of $144 on December 4. On December 13, its trade surged to a high of $110.15. The value dropped afterward when it embraced market consolidation.
Compound has been moving its values based on recurring patterns that appear to be tied to events like macroeconomic updates, the US presidential election, geopolitics shifts, and others.
Since last week, prices of most cryptocurrencies embraced corrections, which explains the reason COMP has been seeing a sideways trend. However, a potential breakout moment could be imminent soon.
