COMP faces technical rejection near $49 despite oversold RSI and ai16z’s fresh deposit.
Retail activity spikes while whales retreat and short interest climbs, signaling fragile momentum.
After four years of holding, ai16z [AI16Z] has deposited 300,000 Compound [COMP] tokens worth $13.76 million into Coinbase Prime, sparking questions about strategic intent.
The venture capital firm still controls 1.34 million COMP, equivalent to 13.45% of the total supply.
This deposit marks a rare movement from one of Compound’s most influential backers, having led both its seed and Series A rounds.
While this could indicate confidence in upcoming developments, it also aligns with elevated retail speculation, prompting analysts to question if this move is an exit strategy or a setup for future market positioning.
Resistance vs. momentum
Despite the buzz, COMP continueed to face rejection under the $49.07 resistance at press time, which aligned with the 0.236 Fibonacci level.
Price action remained confined within a long-term descending channel, with support holding slightly above $43.50. Fibonacci retracement levels at $52.51 and $55.30 posed additional hurdles for any breakout attempt.
Moreover, the Stochastic RSI sat deep in oversold territory near 10.18 and 8.40, suggesting possible reversal conditions.
However, with no confirmed bullish crossover, traders appeared hesitant. Therefore, without strong momentum, COMP could struggle to sustain any upward move.
Source: TradingView
Is the COMP market overheating?
Spot market metrics revealed heightened volatility as total trading activity has reached “Heating” status. Retail trading frequency has spiked significantly, flagged as “Too Many Retail.”
This rapid surge in speculative interest often precedes short-term tops, particularly when not backed by sustained institutional inflows. COMP may become vulnerable to abrupt price swings if momentum shifts.
While the current retail-driven rally may offer quick gains, the lack of depth behind these moves invites caution. Investors should closely monitor whether this surge is organic or simply crowd-induced noise.
Source: CryptoQuant
Have whales started offloading?
Whale activity has taken a bearish turn, with large transactions declining by 8.5% over the past 24 hours.
This dip suggests reduced accumulation or increased distribution from major holders, contradicting ai16z’s apparent confidence.
Although one could argue ai16z’s move may indicate a long-term outlook, the broader trend among large players paints a more cautious picture.
When whales reduce exposure during heightened retail activity, it typically precedes market corrections. Hence, current data imply smart money may be hedging or pulling back rather than aggressively entering.
Source: IntoTheBlock
Short sellers gain
Bearish sentiment dominated on Binance at the time of writing, with shorts making up 53.39% of accounts compared to 46.61% for longs.
This sentiment shift aligned with technical weakness and declining whale support, adding weight to downside risk.
Moreover, rising short exposure during retail exuberance suggested that experienced traders may be positioning for a reversal.
Thus, the imbalance in Open Interest underscores the fragile nature of COMP’s recent recovery attempt.
Source: CoinGlass
The road ahead
Although ai16z’s deposit signals continued involvement, on-chain metrics and technical weakness paint a mixed picture.
Retail speculation is rampant, but whale activity and derivatives data suggest caution.
Therefore, unless COMP breaks above key resistance levels with strong volume, this could be more of a redistribution event than a breakout setup.
Next: BNB sees weakening demand and increased sell-offs: What’s next?
