Compound Market Analysis
- Bearish Structure: Compound had a bearish structure on the 1-day chart.
- Potential Uptrend: Increased buying pressure and signs of accumulation suggest a possible upward price move.
Symmetrical Triangle Pattern
Compound [COMP] formed a symmetrical triangle pattern, observed by crypto analyst Ali Martinez on X (formerly Twitter). A potential breakout could lead to a 20% price increase.
On-chain Metrics and Long-term Insights
While short-term price gains are attractive, long-term on-chain metrics also hold significance for investors. Analyzing the asset on higher time frames may provide actionable insights.
Decline in Selling Pressure
The exchange reserve of an asset indicates accumulation or distribution trends.
- Bear Market Trends: During the bear market of 2022 and early 2023, the exchange reserves showed a slow uptrend, coupled with spikes in COMP withdrawals from exchanges, indicating a shift to cold wallets, a bullish sign for the long term.
- 2024 Outlook: In 2024, Compound’s exchange reserve fell, indicating bullish trends. Even during a rally in November, reserves continued to decline over three months, signifying accumulation.
Exchange Netflows
The 30-day SMA of exchange netflows reflected strong inflows from September to early November. This shift indicated rising selling pressure as tokens were moved to exchanges for sales or collateral.
- Trend Shift: Since the second week of January, netflows have turned negative, with over 1k COMP leaving exchanges daily, further supporting the exchange reserve findings.
Price Action and Indicators
Despite the daily chart reflecting a bearish outlook—with prices just above the $48 support level and the risk of dropping below $46—the A/D indicator has gradually increased over five weeks. The CMF surpassed +0.05, indicating significant capital inflows. Together, increased buying pressure could elevate Compound prices.
Comments (0)