- Compound’s recent falling wedge pattern breakout accomplishes the target.
- The IOMAP model highlights the relatively smooth path toward $900.
- A daily close above the 200 SMA will add credence to the ongoing uptrend.
Compound has continued to rally since the breakout we recently discussed. This bullish price action hints at the increased attention investors are channeling into the decentralized sector. Other Defi tokens that have been performing incredibly well include Uniswap and Maker.
Meanwhile, COMP trades marginally below $500 amid a rejuvenated bullish outlook. Several resistance levels have flipped into key support levels, including the 200 Simple Moving Average (SMA) on the 12-hour chart.
A break above $500 is required to confirm the uptrend toward $900. Therefore, support at the 200 SMA must remain intact.
Can Compound sustain the upswing to $900?
The Relative Strength Index (RSI) has reentered the overbought region; thus, adding credibility to the bullish outlook. This technical tool follows the trend of an asset and calculates its strength. A sustained RSI movement north is a clear indicator of a solid bullish grip. Hence, Compound’s anticipated uptrend to $900.
At the same time, the momentum that followed the falling wedge pattern breakout seems to be adding weight to the uptrend. Therefore, the slightest resistance path will likely remain upward.
COMP/USD 12-hour chart
The In/Out of the Money Around Price (IOMAP) on-chain model adds credibility to the bullish narrative by shining a light on the massive demand zones Compound currently sits on. For instance, in the region between 473 and $487 are nearly 4,300 addresses that previously purchased approximately 491,000 COMP. As long as this buyer congestion at this range remains intact, bulls will stay in control.
On the upside, weak hurdles between $503 and $533 are unlikely to challenge the call for gains eying $900. Hence, the growing potential for the bullish leg stretching from the prevailing market prices.
Compound IOMAP chart
Looking at the other side of the picture
Compound may fail to continue with the uptrend if bulls don’t settle above $500 in the coming sessions. On the other hand, the 200 SMA on the 12-hour chart must remain intact as the immediate support. Otherwise, sell orders could soar as a massive correction comes into the picture. Note support is anticipated at the 100 SMA near $380 and the 50 SMA close to $305.