- COMP price has flashed sell signals on the daily timeframe, hinting at a trend reversal.
- Bearish divergence on the daily chart suggests COMP could shed 30% of its market value and tag $50.
- A daily candlestick close above the $76 hurdle that flips it into a support floor will invalidate the bearish thesis.
COMP price seems to be rallying despite clear signs of waning momentum on the daily timeframe. This development is screaming ‘sell’ and is a warning to the holders of the Compound platform’s token of an incoming drop.
Read more Ripple and XRP coverage here:
XRP update: Ripple win in landmark SEC case likely puts XRP and crypto market in jeopardy for these reasons
Can XRP price hit $1? Watch these levels next
Breaking: Ripple records landmark win against the SEC as court rules XRP is not a security except...
COMP price ready to undo recent gains
COMP price set up two higher highs on July 2 and July 15 at $71 and $76, which at first look seems normal. But on closer observation, investors can note that this uptrend is ready to reverse.
The Wave Trend indicator flashed a bearish crossover on July 7 in the overbought region, which signals that it is time to sell. But COMP price continued to rally higher and set up a higher high on July 15, as mentioned above. This uptick, despite the sell signal, led to the formation of a bearish divergence, which is the second sell signal
The Relative Strength Index (RSI) and Awesome Oscillator (AO) have both set up lower highs, while COMP price has created a higher high. This setup is termed bearish divergence and often results in a downtrend.
COMP/USDT 1-day chart
While the correction outlook for COMP price is based on multiple sell signals, the crypto market recently and suddenly flipped bullish due to the SEC vs. Ripple lawsuit decisions. Hence, a sudden spike in buying pressure in Bitcoin or altcoins is not unlikely.
Under these circumstances, if COMP price produces a daily candlestick close above the $76 hurdle and flips it into a support floor, it will invalidate the bearish thesis. In this case, Compound bulls could propel altcoin to $80.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.