Compound (COMP) has been embroiled in a strong uptrend over the past day as decentralized finance continues to gain steam. According to Coin Market Cap data, the cryptocurrency has gained 15% against the U.S. dollar in the past 24 hours. For context, both Bitcoin and Ethereum have both gained approximately 2.5% over that same time frame.
The DeFi token’s rally comes after it was embroiled in a multi-week bear trend that brought it down approximately 70% from its all-time high.
Analysts expect the Ethereum-based altcoin to move higher in the weeks ahead. Though, there are some that are doubting the value of Compound as other DeFi projects crop up.
Ethereum-Based Compound Rips 15% Higher
Compound is shooting higher to multi-week highs just below $ 190 after plunging to $ 120 just last week. The Ethereum-based altcoin is now printing strong signals indicative of more upside, say analysts.
A historically accurate analyst shared the chart below, writing: “bullish engulfing weekly candle after 68% decline, just buy it man, worry about consequences later.”
A “bullish engulfing” candle is a textbook candle seen in uptrends or at reversals when the price of an asset manages to “engulf” the losses incurred over the candle prior.
Chart of COMP's macro price action by trader SmartContracter (Twitter handle). Chart from TradingView.com
The optimism was echoed by other commentators, who noted that Compound has crossed above pivotal resistance levels.
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DeFi Will Soon See Even More Growth: Analysts
Compound may rally further in the long run as Ethereum’s DeFi sector is believed to be in the early innings of a massive growth cycle.
Spencer Noon, the head of DTC Capital, recently said that the launch of Curve’s CRV token could spur growth in DeFi. He, along with other analysts, believes that CRV will spur a massive influx of capital into the Curve protocol, which will then be distributed to other DeFi protocols and coins.
“Cat’s out of the bag, this is correct. $ CRV is likely the next big domino to fall that puts #DeFi back in a frenzy. That’s what happens when you’re critical infrastructure for farms, have huge daily volumes, plus a lean cap table. Watch 2nd order effects of this launch closely…”
Cat’s out of the bag, this is correct. $ CRV is likely the next big domino to fall that puts #DeFi back in a frenzy. That’s what happens when you’re critical infrastructure for farms, have huge daily volumes, plus a lean cap table. Watch 2nd order effects of this launch closely… https://t.co/Udh4GPQqJ1
— Spencer Noon (@spencernoon) August 6, 2020
Analysts that subscribe to the theory that DeFi will see another round of parabolic growth due to CRV reference Compound’s launch.
When COMP launched in the middle of June, the amount of capital in the DeFi space went parabolic while interest also shot up. COMP’s creation also acted as a wealth creation event for many users, who then siphoned their initial gains into other altcoins.
Featured Image from Shutterstock Price tags: compusd, compbtc Charts from TradingView.com Compound (COMP) Surges 15% as Ethereum's DeFi Space Continues to Swell