Compound (COMP) price remains in a bull market. Here are the important support and resistance levels

Written by: Stanko Iliev
January 12, 2021
  • Compound is an entirely self-governed blockchain with a focus on the financial service
  • Rising above $220 supports the continuation of the bullish trend for Compound (COMP)
  • If the price falls below $180, it would be a strong “sell” signal

In less than two months, Compound (COMP) price has advanced from $80 above $200 and for now, there is no fear of the bear market. Rising above $220 supports the continuation of the bullish trend, but if the price falls below $180, it would be a strong “sell” signal.

Fundamental analysis: Investors in COMP should have in mind that this is a still very risky cryptocurrency

Compound is a decentralized, blockchain-based protocol that allows its users to lend and borrow cryptocurrencies. The native utility token of this protocol is COMP, which is distributed to all lenders and borrowers on this protocol every day.

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Every COMP token represents one vote, and anyone who owns at least 1% of the total supply can vote on proposals to change something on this blockchain-based protocol. Compound is an entirely self-governed blockchain focusing on the financial service that brings the benefits of blockchain in a rapidly expanding DeFi ecosystem.

There are lots of cryptocurrencies that can be lend or borrow on this protocol; some of them include: Basic Attention Token (BAT), Augur (REP), Dai (DAI), Ether (ETH), USD Coin (USDC), Ox (ZRX), Tether (USDT), Wrapped BTC (WBTC).

When you deposit your crypto to the Compound wallet, you immediately start to earn interest denominated in the same token that you lent. On the other side, you pay interest for borrowing, but regardless of whether you are lending or borrowing, you first have to lock in crypto with Compound.

All major cryptocurrencies are advancing this trading week, and this situation also supports the price of COMP. Some analysts say that the cryptocurrency market has entered a bubble, while some analysts think that Bitcoin could dethrone gold as a store of value to hedge against inflation.

The positive news is that JPMorgan Chase CEO Jamie Dimon said that a cryptocurrency market could advance even more. It is also important to mention Tyler Winklevoss said recently that a current bull run is different from the previous boom because institutional investors started to invest in the cryptocurrencies.

“Publicly traded companies like Square and MicroStrategy putting their treasury cash into Bitcoin because they’re worried about the oncoming inflation and the scourge of inflation with all the money printing and the stimulus from the Covid pandemic lockdown,” said Tyler Winklevoss.

Investors in COMP should have in mind that this is still very risky crypto, but now could be a good moment to buy cryptocurrency.

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Technical analysis: Bulls are focused on breaking the resistance level at $220

The current trend of this cryptocurrency remains bullish, and Compound (COMP) is eying to $220 as the uptrend continues.

Data source: tradingview.com

On this chart, I marked important resistance and support levels. The important support levels are $180 and $160; $220 and $240 represent the resistance levels.

Rising above $220 supports the continuation of the bullish trend for Compound (COMP), but if the price falls below $180, it would be a strong “sell” signal.

Summary

The cryptocurrency market is advancing, and some analysts say that the current bull run is different from the previous boom because institutional investors started to invest in cryptocurrencies. This situation also supports the price of COMP, and rising above $220 resistance supports the continuation of its bullish trend.