2022-6-21 17:11 |
Compound price jumped sharply on Tuesday as demand for DeFi tokens bounce back. The COMP token is trading at $42.75, which is about 65% above the lowest level during the weekend. Its market cap has risen to more than $290 million.
Why is Compound rising?Compound is one of the biggest decentralized finance (DeFi) platforms in the world. According to DeFi Llama, the platform has a total value locked (TVL) of more than $2.87 billion, making it the 8th biggest platform in the industry.
Compound is primarily a lending protocol. People deposit their cryptocurrencies in the network and then earn interest from them. This interest comes from its lending services, meaning that it uses the same model as a bank.
Some of the most popular supply tokens in Compound are Aave, Basic Attention Token, Dai, Ether, and Compound Governance token.
COMP is the governance token for the ecosystem. It simply allows people to take part in the platform’s governance by making decisions. For example, they can vote on whether to join another chain like Solana or how to adjust risk in the network. According to its platform, the top addresses in its governance platform are Polychain Capital, Bain Capital Ventures, a16z, and Gauntlet.
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The most recent approved vote was on new collateral assets lik cUSDC, cLINK, cSUSHI, cAAVE, and cYFI. The goal was to adjust the weighting and set parameters to maintain the overall risk of the protocol during the current market sell-off.
The Compound price is rising after Celsius wired $10 million to the platform. The company, which is now going through an existential crisis, made the payment as it tries to stage a comeback. It has already suspended payments to its customers as it works with restructuring experts.
Compound price predictionThe daily chart shows that the COMP price has been in a strong bullish trend in the past three straight days as its demand rises. It is now trading at $43.8, which is much higher than its lowest level last week. It remains below the 25-day and 50-day moving averages while the MACD is below the neutral point.
Therefore, at this stage, the Compound price is still bearish. This rebound could be part of a dead cat bounce, which is usually a temporary rebound after a strong decline. As such, the coin will likely move below $35 in the coming days.
The post Compound Price is in Recovery Mode. Is it a Buy? appeared first on CoinJournal.
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