• Compound is in the initial phases of an uptrend after falling to all-time lows of $86.
  • The DeFi token could break out to $120 if the 100 SMA resistance is turned into support.

Compound bulls managed to wriggle themselves from a downtrend that has kept them hostage since early September. An all-time low of $86 awoke the buyers and encouraged them to take positions. Over the last three days, a remarkable move sent the decentralized finance (DeFi) token in an upward trajectory.

The bullish outlook

COMP is exchanging hands at $102.5 after a considerable spike above a descending parallel channel. Besides, the crypto is sitting on top of the 50 Simple Moving Average (SMA) after it flipped into support.

The Relative Strength Index (RSI) is also making a compelling move from the oversold area. The gradual approach from the overbought region adds credence to the bullish picture and encourages more buyers to join the market.

COMP/USD 4-hour chart

COMP/USD 4-hour chart

A broader look to the upside points to a potential breakout to the 100 SMA, which, if broken, might give COMP a boost to the 200 SMA. A buy signal presented by the TD Sequential Indicator on the daily chart adds weight to the bullish outlook. In other words, Compound could be at the beginning of an uptrend aiming for $120.

COMP/USD daily chart

COMP/USD daily chart

Compound is experiencing a surge in volume, according to the data provided by Santiment. The increase has been consistent since October 18 and seems to have hit a peak on October 22. Coincidentally, the price rallied from the all-time low, breaking above $100.

Social media mentions increased across multiple platforms but lagged behind the volume. As the bulls nurse the uptrend, the mentions are expected to make an upswing, succeeded by another swing upwards. Therefore, traders need to pay attention to these two metrics now that recovery is in the initial phases.

Compound social media mentions/volume chart

Compound social media mentions/volume chart

IntoTheBlock “Daily New Addresses” reinforces the bullish narrative with an increase in the number of newly-created addresses. A higher-high and a higher low pattern appears to be forming on the chart. In context, network growth is a bullish indicator for COMP as it improves the protocol’s inflow and outflow. In turn, optimum liquidity is created to support an uptrend in the price.

Compound new addresses chart

Compound new addresses chart

Looking at the other side of the picture

According to the IOMAP model, COMP/USD is heading into a challenging area due to the supply created by addresses that previously bought approximately 137,000 COMP between $107 and $110. A reversal is likely to take place on testing this resistance zone.

 Compound IOMAP chart

COMP IOMAP chart

On the flip side, immense support above $100 suggests that consolidation is the most probable price action before a breakout occurs. Meanwhile, the most robust buyer congestion zone runs from $103 to $104. Here, nearly 2,300 addresses previously bought roughly 103,000 COMP.


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