Determine Your Entry And Wait
On the 1st of July I published an article entitled "Top DeFi Projects Dumping - Buy Zone Incoming!", where I mentioned where I would be looking to pick up DeFi projects. It was pretty clear that COMP was overpriced at $200 and above. Fomo had people thinking that even $300 was a good entry point, reasoning that COMP had peaked at almost $400! However, I was not buying and stated in the above mentioned article that I was ideally looking for an entry at $175.
Recently, COMP dipped all the way to the $152 level and is currently trading at $160. I did not open a position at $175 as I saw a significant amount of weakness in the price and decided to wait for more of a clear bottom to form. Eight days passed in which the price did not drop below $152, so I opened a new position at $155. I don't see much further downside from here but you never know.
Markets are a bit bullish on the big banking news, ETH is pumping and even BTC is up. After such a significant correction it would be hard to imagine COMP dropping below $150, especially in the above mentioned conditions.
COMP In The Charts
Looking at the daily chart, one can see Compound has been on a downtrend for an entire month, with a bit of an upward spike at the beginning of July. There are also signs of a double bottom forming, which is pretty bullish.
A break and hold above the $170 level would most likely confirm the pattern and bring significant confidence for traders to start opening long positions. As always, I have only used a portion of the funds I have allocated to this trade, in the event there is a flash crash or unseen event take place.
Ampleforth should also be on traders radars as it dumped 30% today with no rebound or significant wicks up. Please remember that this is not financial advice but rather how I view the market. These are my personal views and should be treated as such.