Compound Finance: Investors should not miss this breakout in COMP

  • 1 Compound finance allows you to take and provide financial services for cryptocurrencies.
  • 2 The COMP price structure is forming a triangle and the chances of a breakout are higher.

Cryptocurrencies like Bitcoin allow direct payments without intermediaries. DeFi aims to decentralize all financial services using blockchain protocols and cryptocurrencies.

The Compound Protocol (COM/USDT) mainly focuses on hiring and granting financial services for cryptocurrencies.

Ethereum is the main backbone of the DeFi movement today, as it is a decentralized blockchain that facilitates smart contracts, on which other blockchain-based decentralized applications (dApps) with native cryptocurrencies can be built.

The interest rates in its coin pools are dynamically maintained by Compound based on 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 pull cryptocurrency price data from various exchanges.

Since supply and demand fluctuate, the interest rate for each cryptocurrency varies based on market liquidity. A person can check the current interest rate for the cryptocurrency they wish to lend or borrow on each marketplace page in Compound.

If a person is a DeFi developer, they can use the features 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 cryptocurrency, they can easily interact with Compound through its graphical user interface and one of the supported Compound wallet brands.

Technical Analysis and Price Prediction of COMP Coin

Compound Finance: Investors should not miss this breakout in COMP

TradingView COMP/USDT chart

Despite recent spikes in volatility in the overall market, COMP price action displays a triangle formation on the daily chart, reflecting a lack of volatility and compression in COMP price action.

The continuous resonance within the symmetric pattern is aligned with the market cycle, but limits the range between two boundary trend lines. Therefore, the breakout on both sides will determine the trend. However, the uptrend appears to be more stable. Furthermore, the bulls are supported from below by the EMAs.

The compressive COMP price trend has formed a symmetrical triangle pattern for more than six months. Furthermore, the low volatile phase blocks the sideways pattern and suggests that a breakout is imminent.

The recent bullish reversal from the support trend line challenges the overall resistance trend line and indicates a bullish breakout. Furthermore, the uptrend forms a morning star pattern which increases the probability of a bull run.

Currently, COMP price is trading at $57.1, forming a bullish candle. Furthermore, the growing momentum of the trend in the ongoing bullish cycle increases the chances of a breakout. Therefore the analysis will suggest that the breakout will occur to the upside.

Conclusion

Users can access Compound’s services through its GUI and supported wallets to lend or borrow cryptocurrencies. Despite the recent market volatility, COMP’s daily chart shows a triangle pattern indicating low volatility and compressed price action. Furthermore, the uptrend has 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 person named in this article, are for informational purposes only. They do not provide financial, investment or other advice. Investing or trading in stocks, cryptocurrencies or related indices carries the risk of financial loss.

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