• Advertise
  • Submit a Press Release
NewsBTC
Bitcoin & cryptocurrency news
Crypto.com Logo
  • Home
  • News
    • Bitcoin
    • Ethereum
    • Cardano
    • Dogecoin
    • Ripple
    • DeFi
    • NFT
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • Play GamesTry
  • Bet & WinTry
  • Spin & WinTry
No Result
View All Result
  • Home
  • News
    • Bitcoin
    • Ethereum
    • Cardano
    • Dogecoin
    • Ripple
    • DeFi
    • NFT
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • Play GamesTry
  • Bet & WinTry
  • Spin & WinTry
No Result
View All Result
NewsBTC
No Result
View All Result
Nexo Logo

No Relief for Compound (COMP) as Downtrend Resumes After 45% Rally

Yashu Gola by Yashu Gola
2 years ago
in DeFi
Reading Time: 3 mins read
Advertisement

COMP, a governance token associated with lending platform Compound, is back into rough waters after sailing calmy for days.

The 37th-largest cryptocurrency by market cap fell by $25.14, or 20.15 percent, to $100.68. Its move downside started at a local top of $126.10, established after an eight-day upward consolidation of around 45 percent.

That was similar to how other altcoins performed in the same timeframe: beginning with a rebound rally and lately falling after setting a sessional high.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!
Compound, COMP, DeFi, decentralized finance
The Compound’s long positions failed to match expectations. Source: COMPUSD on TradingView.com
The Compound's long positions failed to match expectations. Source: COMPUSD on TradingView.com

To Compound, however, the latest downside correction appeared more serious. That is because of its prevailing bearish correction that began at COMP’s all-time high near $277 and hinted to conclude at $86.63 – a 68.78 percent decline, overall.

Traders perceived COMP’s sharp rebound from $86.63 as a sign of renewed buying enthusiasm. As of this Wednesday, many among them were claiming to extend their Long targets for the token, with one among them saying that the token would rise to $129.47 in the coming sessions.

But an extreme profit-taking sentiment poured cold water on the bullish targets. COMP plunged, leaving traders with an upside outlook at a considerable loss.

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?
Get 110 USDT Futures Bonus for FREE!

$COMP

Argh, should have waited for a 4h close above the magic EMA 🙁

Doubling down here close to invalidation and giving it up if we don't bounce here. pic.twitter.com/qpJIJirHrO

— Crypto Krillin ॐ (@LSDinmycoffee) October 28, 2020

That left the Compound token’s short-term outlook more uncertain as ever.

What’s Ahead for Compound

Technically, the Compound token appeared stuck below a resistance level at $127.63 that coincided with the 23.6% Fibonacci level of the retracement graph from a swing high of $261.71 to a swing low of $86.21.

Compound, COMP, DeFi, decentralized finance
The Compound token is pursuing a deeper bearish correction following its parabolic rally to $277. Source: COMPUSD on TradingView.com
The Compound token is pursuing a deeper bearish correction following its parabolic rally to $277. Source: COMPUSD on TradingView.com

Traders approached $127 multiple times in the last 30 days to break bullish. But each one of their attempts met with a pullback. On Wednesday also, COMP’s explosive move towards the said level met with extremely high selling pressure.

Therefore, it became vital for COMP to invalidate $127 as its interim resistance level to shift its primary upside target towards $153.25 at the 38.2% Fibonacci line. Otherwise, the token risked crashing back to its sessional low of $86.63 with an additional bearish sentiment below the level.

Overvalued?

The initial Compound gains appeared out of a so-called DeFi breakout quarter, wherein every decentralized finance project returned enormous profits to their stakeholders. Compound, as a distributed lending platform,  was investors’ favorite, locked more than $911 million worth of capital into its liquidity pool, signaling adoption for its COMP tokens.

As of now, the same Compound pool has about $1.06 billion worth of assets. But that is not reflecting the price of COMP. One analyst explained why.

The pseudonymous entity had complained about the COMP’s overvaluation back on July 2, stating that its Compound protocol is basically an AUM business. The ideal valuation of such models is around 1/3 or 1/4 of the total assets in custody.

1/ I'm short on $COMP, the fundamentals of the 'governance', given the public information, don't make too much sense today.

Won't be surprised to see it fall below $100 unless a revenue model is proposed soon. – Read full thread..

— Theta Seek (@thetaseek) July 2, 2020

“BlockFi is valued at around 200M when their AUM was 650M. (This is generous as Goldman Sachs is valued at less than 1/50 of their AUM),” the analyst wrote, adding:

“Given that the COMP market cap is at $2 billion when there’s $1 billion of AUM…the fair value of the token, (assuming similar long term profitability as other crypto AUM businesses) should be at around $50 today.”

The Compound market cap is now just shy of $428,000. That, according to the pseudonymous analyst, should be way lesser than $50.

Tags: compcompounddecentralized financeDeFi
Tweet123Share196ShareSend
Win up to $1,000,000 in One Spin at CryptoSlots
Yashu Gola

Yashu Gola

Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2014 – and has contributed to several cryptocurrency media outlets, including NewsBTC, FxDailyReport, Bitcoinist, and CCN. Academically, Yashu holds a bachelor's in information technology, with majors in data structures and C++ programming language. He has also won the 'Atulya Award' for his efforts towards raising $100,000 for an India-based farming project.

Related Posts

Cream Finance Loses $25 Million To A Flash Loan Attack

Cream Finance Loses $25 Million To A Flash Loan Attack

9 months ago
Uniswap (UNI), Compound (COMP), Other DeFi Coins Are Slipping Lower

Uniswap (UNI), Compound (COMP), Other DeFi Coins Are Slipping Lower

1 year ago
defi bitcoin crypto wheel of fortune

Millions Learn About DeFi From Wheel Of Fortune Contestant

1 year ago
SushiSwap (SUSHI) Undergoes 10% Rally Despite Ethereum Drop

SushiSwap (SUSHI) Undergoes 10% Rally Despite Ethereum Drop

1 year ago
Bitcoin Altcoins

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

1 year ago
bitcoin defi ethereum

Analyst: Post Bitcoin, Traditional Finance Will Flock To DeFi, Not Ethereum

1 year ago

Premium Partners

Top Brokers

PrimeXBT

PrimeXBT

Review · Visit

Top Casinos

BitStarz

BitStarz

Review · Visit
7BitCasino

7BitCasino

Review · Visit
Punt Casino

Punt Casino

Review · Visit
Wildcoins Casino

Wildcoins Casino

Review · Visit
CryptoSlots

CryptoSlots

Review · Visit
mBit

mBit

Review · Visit
CryptoGames

CryptoGames

Review · Visit
Bspin

Bspin

Review · Visit

Sportsbooks

1xBit

1xBit

Review · Visit

LBank Exchange Will List Globiance Exchange Token (GBEX) on May 25, 2022

May 25, 2022

LBank and Adanian Labs Powers Hackathons, Blockchain Education, and Ecosystem Development for Africa

May 25, 2022

Cornucopias: A Revolutionary Cardano Blockchain Project that is Redefining the Gaming Metaverse Industry

May 25, 2022

Caduceus Set Record for BitKeep LaunchPad with 1286% Oversubscribed

May 25, 2022

Fireblocks Adds Support for TRON DAO’s TRX and all TRC20 Tokens

May 25, 2022

ABOUT US

NewsBTC is a cryptocurrency news service that covers bitcoin news today, technical analysis & forecasts for bitcoin price and other altcoins. Here at NewsBTC, we are dedicated to enlightening everyone about bitcoin and other cryptocurrencies.

We cover BTC news related to bitcoin exchanges, bitcoin mining and price forecasts for various cryptocurrencies.

COMPANY

  • Advertising
  • Comments Policy
  • Privacy Center
  • Sitemap
  • About Us
  • Contact

Technical Analysis

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Ripple (XRP)
  • Chainlink (LINK)
  • Cardano (ADA)
  • Tezos (XTZ)

LINKS

Crypto Prices from Nomics

Cryptocurrency news

  • Bitcoin
  • Ethereum
  • Ripple
  • Chainlink
  • Cardano
  • EOS
  • Tezos

© 2021 NewsBTC. All Rights Reserved.

  • Home
  • News
    • Bitcoin
    • Ethereum
    • Cardano
    • Dogecoin
    • Ripple
    • DeFi
    • NFT
    • Sponsored
    • Press Releases
  • Analysis
    • Bitcoin (BTC)
    • Ethereum (ETH)
    • Cardano (ADA)
    • Chainlink (LINK)
    • Litecoin (LTC)
    • Tezos (XTZ)
    • Zcash (ZEC)
    • EOS
    • YearnFinance (YFI)
  • Trading Course
  • Directory
    • Crypto Businesses
    • Bitcoin Brokers
    • Casinos
    • Sportsbooks
  • Play Games
  • Bet & Win
  • Spin & Win

© 2021 NewsBTC. All Rights Reserved.

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy Center or Cookie Policy.