Compound Crypto (COMP) Faces Potential Short-Term Pullback After Massive Rally

Compound Crypto (COMP) Faces Potential Short-Term Pullback After Massive Rally

Compound Crypto (COMP) has experienced a significant surge in price over the past few weeks, marking it as one of the best-performing cryptocurrencies during this period. Since hitting its lowest point in June 2023, COMP has seen a remarkable 150% increase. However, recent analysis suggests that a short-term pullback may be imminent.

As altcoins face a downturn with Bitcoin (BTC) testing the $30,000 level on Monday, the price of Compound Finance’s native asset has also slipped, showing a 3.47% decline as of press time. This drop translates to an 18% decrease from its monthly highs.

The rally in altcoins like COMP crypto was triggered by Bitcoin’s surge from its June lows. While this rally has yielded over 200% returns for those who bought at the bottom, the overall market structure on higher timeframes remains bearish.

Data from DeFi Llama indicates a 30% increase in the Total Locked Value (TVL) on Compound Finance since the beginning of 2023. However, analysis reveals that most of this TVL growth can be attributed to the surge in Compound crypto’s price. Overall, the TVL is still down 18% from its all-time high of $12.45 billion in 2021.

Examining the COMP price chart, we can observe that the coin has been trading within a range of $26 to $71 since June 2021. The lower end of this range has consistently acted as resistance, while the upper end at $71 is also proving to be a significant hurdle. Recently, the price retested this level but failed to break out.

Considering the higher timeframe, the Compound crypto price prediction will remain bearish as long as the price remains below $71. Currently trading at $58.28, a break below $51 could potentially lead the price towards the midpoint of the trading range, which sits at $43. A deeper pullback would raise the possibility of a retest of the range lows at $26.