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It's designed to compliment the Ethereum contracts, be controlled by $COMP governance, and extend DeFi network effects.
— Compound Labs (@compoundfinance) December 17, 2020
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.
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.
The Compound token is eyeing a bearish reversal. Source: COMPUSD on TradingView.com
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.