One of the hottest DeFi tokens in the cryptonews, Compound (COMP) is in the spotlight again for adding around 20% to its price while the rest of the market is stagnating. As Compound surges by 20%, analysts are trying to give the best explanation and resonating behind this rally.
So, what is causing the price of COMP to rally while the rest of the crypto market is sleeping?
For starters, we must revert bak to the previous altcoin news where we shared how the cryptocurrency known s Compound has had an incredible ride over the past month of June. Along with its crypto Twitter hashtag emoji, this DeFi token has been rallying. As Compound surges, most DeFi tokens are following its rise. At the start of the year, we saw Ethereum soaring due to the hype which was surrounding its alternative to traditional finance.
For those of you who don’t know, Compound has stolen the show over the last month – its protocol enables “yield farming” which lets investors lend out some crypto tokens for a return in interest.
Listed on Coinbase last month, Compound surges and has captured the largest market share within days for its total value locked in DeFi. In fact, the dominance thaT COMP has over other DeFi tokens is more than 34% of the total capital in the space.
While many traders turned bearish on the altcoin as soon as it started standing still, we can see that Compound surges again and questions which were raised from its governance had some analysts targeting a low of $50 to $100 for COMP/USD.
1/ I'm short on $COMP, the fundamentals of the 'governance', given the public information, don't make too much sense today.
Won't be surprised to see it fall below $100 unless a revenue model is proposed soon. – Read full thread..
— Theta Seek (@thetaseek) July 2, 2020
However, Compound surges and is pumping yet again, this time going above 20% in gains at the current local high. The DeFi token has been rising even despite Bitcoin and the greater market dropping. Due to the Bitcoin weakness, COMP/BTC also saw a spike in the intraday action of around 25%.
What many know and believe right now is that the crypto market is built around hype and driven by speculation and buzz way more than any technicals or fundamentals. Therefore, the COMP rally could only continue if the field of decentralized finance (DeFi) grows strong.
The big question is – will we see a new Compound rally in the next few days?
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