COMP enters rough waters as the downtrend for the price resumed despite the recent 45% rally. Following our latest altcoin news, we are taking a closer look at the price analysis.
The 37th biggest cryptocurrency by market cap fell by $25.14 or 20.15% to a price level of $100.68. The downside move started at a local top of $126.10 and established after the eight-day upward consolidation from 45 percent. That was similar to how other altcoins performed in the same timeframe as they start with a rebound rally and fall after setting a sessional high. The compound long positions failed to match expectations according to analysts.
To Compound, the latest downside correction seems more serious as COMP enters rough waters. This is because of the prevailing bearish correction that started at COMP’s all-time high near the $277 and hinted to conclude at the $86.63 price. Traders saw COMP’s sharp rebound as a sign of a renewed buying enthusiasm as many of the traders were claiming to extend their long targets for the coin. One of them even said that the token could rise to $129 in the upcoming session.
1/ I’m short on $COMP, the fundamentals of the ‘governance’, given the public information, don’t make too much sense today.
Won’t be surprised to see it fall below $100 unless a revenue model is proposed soon. – Read full thread..
— Theta Seek (@thetaseek) July 2, 2020
The extreme profit taking sentiment poured cold water on the bullish targets as COMP Plunged and left traders with an upside outlook with a considerable loss. This left COMP’s short-term outlook is even more uncertain. The token appeared stuck below the resistance level of $127 which coincided with the 23.6% fib retracement level graph to a high of $261 to a swing low of $86.21. the token is looking for a deeper bearish correction after its parabolic rally to $277.
Argh, should have waited for a 4h close above the magic EMA 🙁
Doubling down here close to invalidation and giving it up if we don’t bounce here. pic.twitter.com/qpJIJirHrO
— Crypto Krillin ॐ (@LSDinmycoffee) October 28, 2020
Traders neared the $127 level multiple times in the past 30 days to break bullish but every attempt was met with a strong pullback. COMP’s explosive move to the said level was met with high selling pressure. Since then, it became vital for the token to invalidate the $127 level as an interim resistance level to shift the main upside target to the $153.25 level. The initial gains came out from the so-called Defi breakout where every decentralized finance project returned major profits to their stakeholders. Compound was the investors’ favorite which locked more than $911 million worth of capital into liquidity pools which signaled adoption for the token. Compound has a pool of about $1.06 billion but that is not reflecting on the price yet. As one analyst explained:
“BlockFi is valued at around 200M when their AUM was 650M. (This is generous as Goldman Sachs is valued at less than 1/50 of their AUM). Given that the COMP market cap is at $2 billion when there’s $1 billion of AUM…the fair value of the token, (assuming similar long term profitability as other crypto AUM businesses) should be at around $50 today.”
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