- Compound price has made a strong recovery in the past few days.
- This is in line with other blue-chip DeFi tokens like Maker and Aave.
Compound price continued its bullish trend as Decentralized Finance (DeFi) blue-chip coins continued their comeback. The COMP token rose to a high of $57.63, which was the highest level since June 8th. It has jumped by more than 123% from its lowest level in June, bringing its total market cap to over $391 million.
Why is Compound rising?
Compound is a leading DeFi blue-chip platform that enables people to earn returns and borrow money in a decentralized format. It has thousands of users from around the world.
According to its website, Compound has a total supply of over $3.3 billion and a total borrow of over $800 million. Its leading markets are USD Coin, Dai, and ETH. Other popular markets in its ecosystem are Wrapped BTC, Tether, and Basic Attention Token (BAT).
Learn more about how to buy Compound.
Like all DeFi platforms, Compound has been under intense pressure in the past few months. Its total value locked (TVL) has crashed from about $9 billion to less than $3 billion. According to DeFi Llama, the TVL of all platforms has dropped from over $250 billion to less than $73 billion.
The COMP price is rising as investors move back to blue-chip DeFi platforms. Some of the most notable tokens that have risen sharply are Uniswap, Aave, and Curve DAO.
One possible reason for the rally is that investors believe that these platforms will not only survive the current crypto sell-off but that they will thrive. The analogy is that of well-known companies that thrived after the dot com bubble.
Another reason is that investors believe that Compound will do well as many centralized platforms collapse. Celsius filed for bankruptcy this week while there are concerns about other similar companies. In a recent note, the firm’s CEO said:
"The reason why this won't happen with DeFi protocols is because, by design, they are completely the opposite of these centralized platforms that are imploding right now. They operate based on open source code that can't change its mind on a whim."
Compound price prediction
The daily chart shows that the COMP price has made a strong recovery in the past few weeks. The token managed to move above the key resistance level at $56.86, which was the highest point on June 25th. It has moved above the 25-day and 50-day moving averages.
Therefore, there is a likelihood that the coin will keep rising now that it has formed an inverted head and shoulders pattern. If this happens, the next key level to watch will be at $70.
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