- Compound price has made a strong recovery in the past few days.
- Its total value locked has risen by more than 5% in the past 5 days.
Compound price continued soaring as demand for the cryptocurrency continued rising. COMP rose to a high of $64, which was the highest level since August 17 of this year. It has jumped by more than 42% from the lowest level this year, giving it a market cap of more than $445 million.
DeFi tokens rebound
Compound is a leading player in the blockchain industry. It is one of the biggest decentralized finance (DeFi) applications in the industry with a total value locked of more than $2 billion. This makes it the 9th biggest DeFi applications in the world.
Compound operates in the lending section of the DeFi industry. It is a decentralized platform that makes it possible for people to borrow and lend cryptocurrencies.
The process works in a relatively simple way. Holders of top stablecoins and cryptocurrencies deposit their funds to Compound with the goal of generating a return. For example, AAVE has an APY of 0.25% while Compound Governance Token has an APY of 0.49%. On the other hand, borrowers move to the platform pay borrow and pay interest in its platform.
Find out how you can invest in Compound.
Compound has a strong market share in the DeFi industry. And in August, the developers launched the third version of the application that had more emphasis on security, capital efficiency, and user experience. It moved from a pooled-risk model where users can borrow any asset. Instead, it introduced the concept of a single borrowable asset.
As such, when a borrower deposits collateral, it remains being their property and it cannot be withdrawn by another user. As a result, users are not able to earn from collateral but they can borrow more.
COMP price also jumped after the developers launched Compound Treasury which allows institutions to borrow using their digital tokens as collateral. Further, its TVL has jumped by 5% in the past 5 days.
Compound price prediction
The four-hour chart shows that COMP price has been in a strong bullish trend after it crashed to a low of $46.55 earlier this week. It has managed to move above the important resistance at $54.66, which was the highest level on August 26.
Compound has also rallied above the 25-day and 50-day moving averages and is attempting to clear the key hurdle at $61.98, which was the highest point on September 15. Therefore, there is a likelihood that the coin will keep rising as bulls target the next psychological level at $70, which is about 15% above the current level.
