- Compound price at the verge of seeing a squeeze higher as supportive measures do their work.
- COMP price could rally up to 55% as only two obstacles are in the way.
- Expect it to hit the upper target if equity markets coincide with the global rally.
Compound (COMP) price is set to rally firmly into the week as the positive sentiment from Friday spills over into Monday. ASIA PAC already saw bulls storming out of the gates and buying any price action available in a renewed hope for a quick end to the inflation drag. With commodities tumbling yet again, inflation pressures could start to ease and open up room for a recovery in risk assets, such as cryptocurrencies, setting up COMP price for a lucrative 55% gain.
COMP price needs to jump one hurdle
Compound price looks to be set up perfect for a rally of just 55%, as a technical setup is unfolding this morning. After price action shot through $50.63, it came back down for a retest over the weekend, found support, and now looks set to pop above the high of last week. With a perfect playbook long-strategy, traders could be bracing for a rally up to $60, which coincides with the 55-day Simple Moving Average (SMA).
COMP price will see traders probably taking a bit of profit around that 55-day SMA, as it is a crucial level to surpass if price action wants to rally further. Should equities keep rallying throughout the week, expect to see a spillover effect, aiding COMP price action with tailwinds, and lifting it above that technical hurdle. From there, a region opens up with no real resistance before roughly hitting $79, with the monthly pivot and a critical historical level coming into play.
COMP/USD daily chart
Since last week’s rally has been so quick and stretched, the Relative Strength Index has been overheating quite quickly and could hit the overbought level even before the $80 handle is reached. That would lead to the rally losing steam and possibly see bigger profit-taking, with COMP price action collapsing to $50.63, to look for support again. Should that level not hold, expect to see a full paring back towards $30 as the whole rally gets unwound.
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