Today, well-known crypto trader Ali Martinez brought attention to 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.
Ali Martinez analyzed the data shared on the X platform and identified that Compound is currently forming a bearish pattern. This analysis is derived from COMP’s historical behavior, which seems to follow similar patterns.
According to Ali’s chart, at the time of his analysis, COMP is trading at $77.88. 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 slump of the same magnitude. Therefore, it is likely that COMP will soon experience a potential downward momentum, leading to a fall to $49.07.
Based on Ali’s chart, the current price movement indicates that COMP is forming a “head and shoulders” pattern. This technical indicator suggests a shift from a bullish trend to a bearish one.
The analysis reveals that the pattern began to form after several unsuccessful attempts to reach $100 in late December and this month. With a current price drop of 18% in the last seven days, this formation is evident, as shown in the right shoulder on 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.
The global cryptocurrency market is currently experiencing a significant cooldown due to a steady decline in the US stock market. This decline has caused fear among traders and led to 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 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 steadily rose since the beginning of November, reaching a high of $144 on December 4. On December 13, its trade surged to a high of $110.15. The value then dropped as it entered a period of market consolidation.
Compound’s value has been influenced by recurring patterns tied to events such as macroeconomic updates, the US presidential election, geopolitical shifts, and others.
In the past week, the prices of most cryptocurrencies have experienced corrections, which explains why COMP has been in a sideways trend. However, a potential breakout moment could be imminent.