Compound (COMP) Outruns Top DeFi Tokens as TVL Closes Above $2B

Compound (COMP) Outruns Top DeFi Tokens as TVL Closes Above $2B

Listen to Article

Compound Finance’s native token COMP was among the biggest gainers in the decentralized finance space on Wednesday.

The fourth-largest DeFi token by market cap surged by more than 10 percent, hitting an intraday high of $154.08 as traders assessed a flurry of upside fundamentals around it. A pseudonymous analyst noted that the Compound protocol lured traders with competitive annual percentage yields on its staking platform. That allowed its liquidity pool to attract about $820 million worth of tokens in just five hours.

The Compound Chain will also introduce a native stablecoin CASH to pay block validators. COMP will continue to serve as a governance token, providing its holders the right to propose and vote for changes in the core Compound protocol.

Read more:  Analyst: Key Amazon Stock Fractal Is “Anti-FOMO” For Bitcoin

The feature expects to come out in the first quarter of 2021.

COMP At Risk, Nevertheless

The latest COMP price rally, meanwhile, came with its own set of bearish foretellings. Technically, its December uptrend drew what analysts call an “Ascending Broadening Wedge.”

The pattern forms when an asset trends inside an area between two diverging trendlines, with the upper one acting as resistance and the lower one as support. COMP is fluctuating inside a similar structure since early November, as shown in the chart below.

Compound (COMP) Outruns Top DeFi Tokens as TVL Closes Above $2BThe Compound token is eyeing a bearish reversal. Source: COMPUSD on

Ascending Broadening Wedges ends up turning assets lower 79 out of every 100 times, according to a study by Central Charts. Meanwhile, there is a 40 percent chance that the price may head towards the upper trendline for a pullback. That roughly puts COMP en route to a $200-valuation.

A breakdown below the Wedge could bring the price to as low as $81.

Read more:  It’s “Bounce or Die” for’s YFI as Selling Pressure Ramps Up


Please enter your comment!
Please enter your name here