- Compound rolled out its own price oracle in a bid to move to the Open Price Feed
- The buyers managed to held the support below $120, setting up a base for the bounce
- The price action is likely to head north from here after the trend reversal has been initiated
Compound (COMP) price surged around 25% this week after the platform rolled out its own price oracle. COMP price has now erased all losses from a prior week, creating a base to push higher.
Fundamental analysis: A new product rolled out
Compound, the Ethereum-powered money market protocol, has rolled out its own price oracle in a bid to move to the Open Price Feed, its permissionless token prices feed. A price oracle refers to a third-party, decentralized feed that contains the required data to conduct smart contracts.
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Price oracles are used by a number of open finance platforms to provide consumers with various services including margin trading and lending. Compound has been working on testnet deployments over the past ten days.
Details about the deployments are available on GitHub, Compound wrote in a blog post on Friday. The platform said it is operating an aggregator that users can use to fetch data on published prices. The prices are provided directly by the reports through their public APIs.
The protocol has also developed a constantly updated notebook that enables users to publish current prices to the chain whenever they want. They have also created a price page where users can look at the current status of the system. The information will also be available on-chain, according to the blog post.
“We are operating an aggregator, where anyone can easily fetch our mirror of the reported prices to be posted to the oracle. These prices are also readily available directly from each reporter, via their public APIs. We’ve also created a notebook to make it easy for anyone to post the current prices to the chain at any time.
We’ve put together a prices page, to make it easy for everyone to check the current state of the system. Of course, all this information is also available on-chain, without any dependency on our infrastructure.”
The protocol created the Open Price Feed to make sure the crypto community is able to use and upgrade a price feed that operates without depending on the Compound infrastructure. In the feed, reporters will be able to post price data via a known public key, which any Ethereum address can submit on-chain.
Technical analysis: Trend reversal
COMP price has bounced off the lows after the sellers were unable to extend the downtrend below $118. This failure provided the bulls with a chance to reverse the trend, which exactly happened this week.
As long as the price action closes above $153 on a weekly basis, the bulls are in control in the short-term. The price action got rejected at $163 today, which is the intraday resistance. A move above this level opens the door for $175, another horizontal resistance.
Compound has introduced its permissionless price oracle as a part of its transition to the Open Price Feed. In the meantime, the price action has bounced off the lows.