DEFI has been hot again, how do things look on the COMP chart?

By EncryptShawn

6 days ago

6 days ago

Lets take a look at what the charts and indicators have to say.

Structure and Price Action:

**Symmetrical Triangle Formation**:
The chart shows a clear symmetrical triangle, indicating a period of consolidation following a sharp upward movement. Symmetrical triangles are neutral patterns but typically resolve in the direction of the preceding trend, which is bullish in this case.
**Downward Red Trendline**:
The descending resistance line has formed, creating consistent lower highs. This indicates selling pressure at each attempt to move higher.
**Ascending Support Line**:
The upward green support line is holding, forming the triangle's lower boundary. This support has been tested multiple times and remains a key level.
**Consolidation Zone**:
Price is currently trading in a narrowing range, respecting both the upward and downward trendlines, signaling indecision and a pending breakout.

Support and Resistance:

**Immediate Resistance**: $110–$115 (aligned with the descending red trendline and near-term resistance).
**Key Support Levels**:
$100: Critical psychological and structural support.
Below $100: Next key support around $90 (aligned with the green order block zone).

Indicators:

Moving Averages (EMA 20/50/100/200):

Price is attempting to reclaim the **EMA 20** (~$107), which suggests cautious short-term bullish momentum.
The **EMA 50** (~$108) is acting as resistance, which needs to be cleared for further upside.
Long-term support sits at the **EMA 100/200** (~$106.5 and $85), providing structural strength if the price falls lower.

Money Flow Index (MFI):

MFI is at **34.94**, indicating the market is approaching oversold levels. This suggests the potential for a rebound if buyers step in.

Stochastic RSI:

The Stochastic RSI has turned upward from **oversold territory** and is crossing upward. This signals possible short-term bullish momentum.
However, a failure to reclaim resistance could result in a false signal and continued downward movement.

Volume:

Recent volume during the triangle consolidation remains **low**, reflecting indecision among market participants.
A breakout with strong volume will confirm the next directional move.

Pattern Analysis:

The **symmetrical triangle** pattern suggests a major move is imminent.
Given the strong preceding uptrend, the pattern leans slightly bullish. However, failure to hold support at $100 could shift momentum downward.

Probabilistic Outlook:

Bullish Breakout (Primary Scenario):

If price breaks above $110 (descending trendline resistance), it will signal a continuation of the prior uptrend.
Key upside targets:
**First Target**: $115–$120
**Second Target**: $125–$130 (previous highs)

Bearish Breakdown (Alternate Scenario):

If price breaks below $100, it invalidates the ascending support line and signals a bearish reversal.
Key downside targets:
**First Target**: $90 (order block zone)
**Second Target**: $85–$80 (EMA 200 zone and additional order block).

Key Signals to Watch:

A breakout above the descending red trendline (~$110) = **Bullish confirmation**.
A breakdown below $100 = **Bearish confirmation**.
Volume spike during the breakout or breakdown will validate the move.

Conclusion:
The chart shows **neutral consolidation** within a symmetrical triangle. The slight bullish bias comes from the prior strong uptrend, but a breakdown below $100 would shift momentum bearish. A breakout above $110 with volume will confirm bullish continuation, while a break below $100 will target further downside. Monitor price action closely around these key levels.

EncryptShawn

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