What’s Fueling DeFi Token Compound’s Powerful 20% Intraday Rally

Tony "The Bull" Severino

Last Updated: July 5, 2020 5:30 pm

3 mins read

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One of the crypto market’s hottest DeFi tokens, Compound (COMP) has gone on an over 20% intraday rally. Meanwhile, the rest of the market is seeing red due to overall Bitcoin weakness.

What’s causing Compound to stand out and surge while the rest of the crypto market tanks?

Compound Becomes Breakout Superstar in Already Red Hot DeFi Space

The cryptocurrency known as Compound has had an incredible ride over the last month. Decentralized finance along with crypto Twitter hashtag emoji, are all the rage right now.

The former of the two trends include Compound’s rise into crypto market super stardom.

Most DeFi tokens have been on the rise in 2020. At the start of the year, Ethereum soared due to the hype surrounding the alternative to traditional finance.

Over the last month however Compound has stolen the show.

The Compound protocol enables “Yield-Farming” which lets investors lend out crypto tokens for a return in interest.

The asset was listed on Coinbase last month and within days captured the largest market share for total value locked up in DeFi. Its dominance reflects over 34% of the total capital in DeFi.

COMPUSD Daily Coinbase | Source: TradingView

What’s Behind The Massive Surge on COMPUSD and COMPBTC?

Although Compound launched as the hottest new DeFi token, as soon as it began to cool off at all, traders turned bearish on the altcoin.

Questions arising from the protocol’s governance model had some analysts targeting as low as $50-100 for COMPUSD.

But Compound is pumping yet again, this time surging as much as 20% intraday at the current local high.

The DeFi token has been rising even despite Bitcoin and the greater market falling.

Due to Bitcoin weakness, COMPBTC also saw an over 25% intraday spike.

COMPBTC Daily Coinbase | Source: TradingView

On both trading pairs, Compound has since retraced from the highs set but should close out the daily with a strong push from bulls.

The pump could be continued bullish momentum due to such hype surrounding the hot new DeFi token. Or it could be due to a short squeeze of trigger-happy bears who shorted too much, too soon.

The crypto market is driven by speculation and buzz more so than technicals or fundamentals. Few trends over the last four years of the cryptocurrency industry have been as hyped as decentralized finance.

With how hot DeFi is there could be no stopping the Compound train now that it’s left the station.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

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Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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