Compound’s COMP skyrockets by 35% intraday as the primary defi token that sparked the rest of the market’s hottest trend in the past few years. The altcoin token increased sharply as a part of its ongoing 90% climb in August so far so let’s find out more in the upcoming altcoin news today.
As COMP skyrockets, many wonder what’s driving the sudden resurgence in the DeFi token, and will the gains continue? The asset allowed the crypto holders to lend out their tokens in return for APY and the profitability in lending sent the asset’s value into the sky. Soon enough, a great rotation of capital took hold across the crypto market and prompted investors to seek out the next hot DeFi as the altcoin corrected.
Analysts warned about this possible behavior and it resulted in some traders losing some of their investments as the projects crashed from their surges. Still, the decentralized finance mini-bubble has yet to burst and it could have prompted capital to slide back into COMP where the trend began. Over the past 24 hours, Compound surged by more than 35% from less than $200. The craze surrounding the new YAM token could be causing the pump but it could also be from the profit-taking in some of the other projects.
However, this is not something strange. As cryptocurrencies are a speculative asset class, the recent DeFi, and Uniswap boom, it sure looks like a bubble. Investors are irrational and money is being made on every corner but this could all come crashing down if the crypto bandwagon starts to move away from its tracks. The difference between the decentralized finance and the past crypto bubble is that DeFi is a sustainable trend that offers real market value but as crypto investors do, expectations outweigh what is realistic and then get a reality check.
When it comes to Compound, the technical indexes show that the altcoin’s rally has a lot more room to grow. The Average Directional Index is a popular measuring tool that shows the bull trend hasn’t even begun. According to this indicator, the trends don’t begin to feel stronger until the indicator rises to a reading above 20. The compound is now at 18 but will push higher. The bullish crossover of the Directional Movement Index points to bullish momentum in the Defi token.
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