- 1 Compound finance enables borrowing and lending financial services for cryptocurrencies.
- 2 COMP price structure is forming a triangle and the chances of a breakout are higher.
Cryptocurrencies like Bitcoin allow direct payments without middlemen. DeFi aims to decentralize all financial services using blockchain protocols and cryptocurrencies.
The Compound protocol (COM/USDT) is primarily focused on borrowing and lending financial services for cryptocurrencies.
Ethereum is the primary backbone of the DeFi movement today, as it is a decentralized blockchain that facilitates smart contracts, upon which other decentralized blockchain-based applications (dApps) with native cryptocurrencies can be built.
The interest rates in its coin pools are dynamically maintained by Compound based on the supply and demand for the particular cryptocurrency. Coin prices are fed into the protocol using Open Price Feed, which is a system based on Chainlink (LINK) oracles that source crypto price data from various exchanges.
As supply and demand fluctuate, the interest rate for each crypto varies according to the liquidity in the market. A person can check the current interest rate for the crypto a person wishes to lend or borrow on each market page in Compound.
If a person is a DeFi developer, they can use the functions provided by Compound to integrate the protocol into the working mechanism of their dApp.
If a person is an individual looking to lend or borrow crypto, a person can easily interact with Compound through its graphical user interface and one of the supported Compound wallet brands.
Technical Analysis & Prediction of the COMP Coin Price
COMP/USDT chart by TradingView
Despite recent volatility spikes in the overall market, COMP price action shows a triangle pattern formation in the daily chart, which reflects a lack of volatility and compression in the COMP price trend.
The ongoing resonance within the symmetrical pattern is aligned with the market cycle, but it limits the range between two boundary trendlines. Therefore, the breakout on either side will set the trend. However, the uptrend is looking to be more firm. Moreover, the bulls are supported from below by the EMAs.
The compressing COMP price trend has formed a symmetrical triangle pattern for more than six months. Moreover, the low volatile phase bottles up the sideways pattern and suggests a breakout is imminent.
The recent bullish reversal from the support trendline challenges the overhead resistance trendline and indicates a bullish break. Additionally, the uptrend forms a morning star pattern increasing the likelihood of a bull run.
Currently, the COMP price is trading at $57.1, forming a bullish candle. Furthermore, the growing trend momentum in the ongoing upcycle increases the chances of a breakout. Therefore the analysis will suggest that the breakout will be towards the upside.
Conclusion
Users can access Compound’s services through its GUI and supported wallets to lend or borrow crypto. Despite recent market volatility, COMP’s daily chart shows a triangle pattern indicating low volatility and a compressed price trend. Moreover, the uptrend formed a morning star pattern, increasing the likelihood of a bull run.
Technical Levels
- Support Levels: $47.9 and $39.7
- Resistance Levels: $56.9 and $72.8
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos or related indexes comes with a risk of financial loss.
Adarsh Singh
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
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