Compound token doubled in value this month.
The token met resistance at $56.
COMP is currently bearish but has a reference bottom at $27.
Compound token COMP/USD is a top gainer cryptocurrency this month. It traded at a low of $27 in mid-June before climbing to a high of $56 on June 26. The gain doubled in less than two weeks. Comp is now retreating and is trading at $48. We believe COMP/USD is showing promising signs of recovery, and investors should take note.
Compound claims to be an algorithmic and autonomous interest rate protocol for developers. The DeFi protocol also rewards users for depositing their tokens in supported liquidity pools. The network achieves this by matching borrowers and lenders while rewarding the liquidity providers. It then makes sense that Compound has a space in the decentralization of finance.
Crypto volatilities and the nascent industry of DeFi have slowed the uptake of networks like Compound. The network’s token COMP has been subdued as it trades significantly lower from its all-time high. However, COMP bottomed at $27, and investors should be keen to catch another bottom.
COMP is retracing after hitting a resistance
Source – TradingView
Technically, COMP’S established resistance is at $56. The price is retracing after hitting the level. The MACD confirms a developing bearish momentum. The MACD line crossed below the moving average. The price of $56 also coincided with overbought conditions as the RSI touched 78. However, we believe COMP is unlikely to fall below $27, which is the overbought level. Investors should be keen to buy lower from the current retracement above $27. Long-term COMP recovery will be experienced if it breaks above the strong resistance of $56.
Concluding thoughts
COMP has doubled in value in July. The cryptocurrency is retracing after meeting resistance at $56. We expect the current weakness to continue until the token finds support. Investors should be keen to buy lower but above $27.
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