Is now the time to spend in COMP?

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DeFi’s success may have dwindled marginally in comparison to the DeFi Summer in 2020. However, this does not mean that the room isn’t crowded with coins that have been performing admirably. At the time of writing, there is approximately $49.06 billion locked in DeFi, and the rise in TVL is a staggering 6190 percent as compared to April of 2020. Compound, Maker, and Uniswap are the top three tokens in DeFi, and although their improvements are remarkable, it is important to consider COMP’s recent results.

Compound has over $9 billion in TVL and can be an option for many traders’ investments in the new market in many respects. The top two cryptocurrencies in the cryptocurrency industry, Bitcoin and Ethereum, continue to draw the most buyers and publicity. However, recent pricing activity shows that both have seen their momentum slow, and while there may be progress to be made in the short term for new traders joining the digital assets market, looking past BTC and ETH may be critical.

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Compound’s market behaviour and on-chain dynamics seem highly positive in this situation. According to Glassnode info, COMP added over 2.3k new non-zero balance holders in the last week, taking the total to over 148k addresses, a 1.5 percent rise. Surprisingly, COMP’s price has more than doubled over the same time span, rising from $227 to over $540. However, it is also important to note that just like many of the market’s altcoins, COMP is also susceptible to corrections as part of the larger altcoin market that continues to be highly correlated to Bitcoin.  This was evident in the past few days, as the token endured a slight price correction and continues to head back upwards from a price point of around $460.

Source: Glassnode

Taking a look at the coin’s transaction volume also illustrates this growth COMP has been witnessing. According to Glassnode,

“after a lull in on-chain activity through early March. At present, 200k to 300k COMP are transacted daily which is approaching transaction volumes similar to early Feb when COMP was hitting its all-time-high price of $564.81.”

Although turning away from exchanges is seen as a positive sign in terms of long-term hodler sentiment for Bitcoin and ETH coins, it does not have to mean the same across the board. For COMP, the balance kept on exchanges has increased in tandem with the token’s price over the last two weeks. This week, approximately 41.1k COMP were deposited to exchanges, resulting in a 20% rise in exchange balance. From a pricing standpoint, it demonstrates that more traders are aggressively selling COMP and are strong players in the existing market with a healthy trading scale.

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COMP has seen considerable growth in recent months, and this momentum is likely to continue; however, this does not mean that the wider market’s impulses and sentiment do not impact the coin. COMP experienced a minor correction and has swayed to Bitcoin’s melody – a trait shared with all of the market’s altcoins. However, as the price approaches its all-time high, traders will profit from including COMP in their portfolios and looking past top coins such as BTC and ETH. When 2021 continues, it will be exciting to see how the crypto industry expands past the market giants.

 

 

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