Is selling now overdone for The Compound token (COMP/USD)?
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The Compound token has been stable after a bear market
Prolonged crypto winter and liquidity issues facing crypto firms remain a threat
COMP token could accelerate weakness if buying strength remains weak
The Compound token (COMP/USD) looked poised for a sustained recovery in June. Since recovering from the June bottom price of $26, the token remained bullish, hitting $70 in August. Since then, weaknesses have brought the token down to $37. However, for 3 weeks, the cryptocurrency has been trading at the same level. We investigate if it’s worth calling for a buy trade at the crucial zone. But first, why has COMP been unable to replicate gains?
The Compound is a decentralised protocol that makes it possible to lend and borrow crypto. In other words, Compound takes away the role of middlemen in traditional finance. It allows financial services through smart contracts and in a decentralised manner. Coupled with the backing of the Ethereum blockchain, Compound grew as an important DeFi project.
A liquidity crunch impacting crypto firms has slowed the growth of DeFi and leading blockchains in the sector. The latest to fall victim in the sector is BlockFi. The once-popular crypto lender filed for bankruptcy on Monday. BlockFi joins the growing list of Voyager, Celsius, Three Arrows Capital, and FTX, which have faced bankruptcy.
The latest development may not be good cryptocurrency news for protocols such as Compound. Its native token, COMP, is consolidating ahead of the next move.
COMP battling $43 resistance amid price consolidation
COMP/USD Chart by TradingView
Technically, COMP is consolidating in a bear market. The cryptocurrency lost the $43 level, which has now become a resistance zone.
The moving averages are bearish for the cryptocurrency and offer resistance above.
What next for COMP?
While consolidation at $35-$37 suggests that bears are getting exhausted, it does not signal a buyer’s activity. The cryptocurrency lacks the upside, with the resistance and moving averages above a stumbling block.
For the COMP price to go higher, the cryptocurrency must recover above $43. Otherwise, the June lows of $26 remain in sight.
Where to buy COMP
eToro
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Buy COMP with eToro today
Disclaimer
Bitstamp
Bitstamp is a leading cryptocurrency exchange which offers trading in fiat currencies or popular cryptocurrencies.
Bitstamp is a fully regulated company which offers users an intuitive interface, a high degree of security for your digital assets, excellent customer support and multiple withdrawal methods.
Buy COMP with Bitstamp today
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