Compound (COMP) is facing a deepening bearish trend following a decisive monthly close below the key support level at $39.62.
This critical break has shifted momentum heavily in favor of sellers, signaling the possibility of further losses in the sessions ahead.
The recent price action has invalidated the prior range-bound structure and triggered a fresh leg lower, with COMP now exposed to its next major support zone at $25.30 — the previous significant low recorded from June 2023. This level also serves as our primary bearish target as downside momentum accelerates.
Key Technical Levels
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Broken Support: $39.62
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Next Major Support / Bearish Target: $25.30
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Invalidation / Stoploss: $52.90
Technical Overview: Bears Take Control
The Compound chart reveals a textbook breakdown pattern. Following a series of lower highs, COMP failed to defend its long-standing support at $39.62, which had held since mid-2023. The monthly close beneath this level confirms a bearish continuation, potentially opening the door to a deeper move.
Short-term attempts at recovery have been rejected below the $45.00–$47.00 region, turning prior demand into resistance. The market is now likely to continue trending downward unless there’s a sharp reversal and reclaim of $39.62 — which currently looks unlikely amid prevailing market weakness.
The structure also highlights an uncontested zone between current price levels and the June 2023 low, suggesting a clear path toward the $25.30 target. General market conditions and negative sentiment are still in play, and could further accelerate the sell-off as momentum builds.
If the market does find support at that major low, we could see a temporary relief rally, but the overall bias remains bearish unless price reclaims the $39.62 threshold on higher timeframes.
Compound’s Technology & Vision
Compound is one of the original pioneers in decentralized finance (DeFi), providing a permissionless lending and borrowing protocol built on Ethereum. It allows users to deposit crypto assets to earn interest or borrow against their collateral without needing a centralized intermediary.
A key innovation introduced by Compound is the use of cTokens, which represent claimable interest-bearing deposits. This enabled broader composability across DeFi protocols and laid the groundwork for innovations in collateralized lending markets.
Compound is governed by holders of the COMP token, who vote on protocol upgrades, risk parameters, and the addition of new markets. This governance-first approach made Compound a reference model for DeFi DAOs.
Despite its foundational role in the space, Compound has been under pressure from newer, more capital-efficient protocols offering flash loans, real-world assets, and Layer 2 integrations. The protocol’s adoption curve has slowed, and the COMP token’s value has struggled to reflect its early dominance.
Unless Compound can reassert its relevance with protocol upgrades, new utility mechanisms, or ecosystem partnerships, investor interest may continue to wane — aligning with the bearish structure we now see on the chart.
Conclusion
With monthly structure broken, the Compound chart now favors continued selling pressure. As long as price remains below $39.62, we anticipate further downside toward the $25.30 level. Momentum is firmly in favor of bears, and caution is advised until a clear bullish reversal or reclaim of broken support materializes.
Shortcut
