• Tue. Oct 4th, 2022
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1660592547762 e4823453 0d05 4d49 a86f f883de30731e

  • Compound protocol plays a role in DeFi through crypto lending.

  • The protocol runs on the Ethereum blockchain.

  • COMP has been gaining slowly after breaking above a key resistance at $55.

Since breaking above the $55 resistance last month, Compound COMP/USD has negligible gains. The cryptocurrency trades at $61.7, slightly above the support. However, the token remains bullish, and investors should be keen at the current valuation.

Compound was founded on the promise of revolutionizing the DeFi sector through crypto loans. Users deposit their crypto into a pool as deposits which are extended as loans for interest. Depositors also receive cTokens, which is tradable and transferable.

Compound token gains largely stem from the broader recoveries in cryptocurrencies. Nonetheless, DeFi tokens are earning boosts from the anticipated Ethereum shift to Proof-of-Stake. With COMP based on the Ethereum blockchain, it is one of the tokens to benefit from the spillover.

COMP maintains above the moving average and breakout zone

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Source – TradingView

From the technical outlook, COMP is bullish. The token is retreating after making small gains in the last one week. However, COMP is yet to break below the 50-day moving average since mid-July. 

The MACD line is crossing below the moving average suggesting the bear pressure could continue. COMP could slide back to the $55 level or the 50-day MA. Investors should watch price action for a potential to buy the token. COMP has the next resistance at $75 if the price maintains above $55. The token presents an opportunity to buy and hold in the long term.

Concluding thoughts

Compound token is bullish despite the latest correction. The blockchain is one likely to benefit from the anticipated Ethereum shift to Proof-of-Stake. The $55 support remains the level to watch. The token could also initiate a bullish reversal at the 50-day MA.

The post Compound protocol token maintains uptrend despite sluggish gains appeared first on CoinJournal.

Ndasi Tata

Ndasi Tata is a Cameroonian-born Bitcoin entrepreneur and former state journalist. He earned an M.Sc from the University of Nicosia in Cyprus in Blockchain and Digital Currency. He uses a variety of social media channels to promote his ideas and projects , and he's a major proponent of Bitcoin in Africa.

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