The Compound token has been stable after a bear market
Prolonged crypto winter and liquidity issues facing crypto firms remain a threat
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
Binance is one of the largest cryptocurrency exchanges in the world. It is better suited to more experienced investors and it offers a large number of cryptocurrencies to choose from, at over 600.
Binance is also known for having low trading fees and a multiple of trading options that its users can benefit from, such as; peer-to-peer trading, margin trading and spot trading.
Coinbase is a global cryptocurrency exchange. Its platform is well designed for beginner investors and it offers a wide range of coins, as it has over 100 to choose from.
Coinbase has high level security built into the platform, a range of diverse features to use and it offers its users options for storing their crypto, such as being able to store coins on the Coinbase exchange.