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The Compound token has been stable after a bear market
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Prolonged crypto winter and liquidity issues facing crypto firms remain a threat
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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
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 is a global social investment brokerage company which offers over 75 cryptocurrencies to invest in.
It offers crypto trading commission-free and users on the platform have the option to manually invest or socially invest.
eToro even has a unique CopyTrader system which allows users to automatically copy the trades of popular investors.
OKX
OKX is a top cryptocurrency exchange which offers over 140 cryptocurrencies to invest in.
OKX takes customer security very seriously, they store almost all of their clients’ funds in cold storage, and the exchange is yet to be hacked.
On top of this, the exchange offers very low fees and customers can even use their crypto as collateral for loans on the platform.
The post Is selling now overdone for the Compound token? appeared first on CoinJournal.