The Compound project ends 2020 on a high note, setting a new personal record for locked funds – $1.84 billion. Taking 2nd place among the biggest DeFi projects, Compound has great prospects to remain in the top three.
However, in the COMP token market, trading volumes are relatively low. Only 10th place with a total daily volume of $127,167,160 is occupied by COMP. For comparison, daily LINK volumes are $1,486,981,093 and UNI – $553,492,255.
Buyers firmly keep their trend
The strong downward trend reversal in late October 2020 and the test of $80 marked as the beginning of the COMP market recovery. Almost second month the COMP price is moving in a strong trend.
Recently, the test of $123 confirmed this. Given how brightly other DeFi projects could afford a 40-50% fall – COMP buyers have saved the market from such annoyances.
15% is the maximum value of the price fall on 23 December. The growth correction in the COMP market on 18 December began due to an unsuccessful attempt by buyers to fix above the mark of $152.5.
Going back a bit in history, we see that on 8 December, anomalous daily volumes of $428,045,770 was recorded. Almost 3,5 times higher trading volume did not allow buyers to confidently fix above the mark of $152.5 on 8 December.
At the time of writing, the COMP price is $139.6. To continue the medium-term growth of the COMP price to $258, buyers will again have to fight for a critical point.
Negative scenario for the Compound market
Given that on 17 December, buyers were less enthusiastic about storming the mark of $152.5 and could not keep it – there is a possibility of the COMP market correction beginning.
The signal for this will be an increase of sellers’ aggression near the critical point and the formation of pins on the daily timeframe:
In this case, a deep correction with a target of $100 will start. The forecasted correction of 78.2% fits into the wave model of trend formation. This correction will confirm the global bottom in the market.
It will provoke an even stronger wave of growth with targets of $258 and $370. Therefore, the COMP market is entering the New year with little intrigue about the growth scenario. In any case, next year promises to be generous on profits in the DeFi space.