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ETHEREUM’S COMPOUND (COMP) SLIDES INTO A MULTI-MONTH LOW DESPITE DEFI EXPLOSION (Just in)

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Ethereum
  • While Bitcoin and Ethereum have seen notable bounces since imploding on Saturday evening, Compound and other altcoins are underperforming.
  • The Ethereum-based coin is down 7.5% in the past 24 hours as per data from Coin Market Cap.
  • This comes in spite of the fact that decentralized finance (DeFi), which Compound is a market leader in, has seen strong adoption.
  • Altcoins could see further losses against Bitcoin and the dollar if the market leaders continue to undergo bouts of volatility.

COMPOUND SLIDES LOWER IN SPITE OF DEFI STRENGTH

The Ethereum-based (COMP) was the hottest token of June, But much has changed in the past five weeks.

Also even in the past 24 hours, the Ethereum-based altcoin has dropped by just around 7% against the U.S. dollar. Unlike Ethereum and Bitcoin, it failed to recover a majority of the losses it incurred during Saturday night’s flash crash.

With this latest drop, COMP is near multi-month lows not seen since the launch of the asset in the middle of June. At the current price of $128, the asset is also down by approximately 70% from its all-time high price set in late June.

This drop comes in spite of the fact that Compound, which the COMP coin is critical to, is the second-largest DeFi protocol and continues to gain traction. In fact, data suggests that there is around $767 million worth of cryptocurrency locked in the protocol.

Analysts expect the Ethereum-based coin to decline further as time goes on, unfortunately for its holders.

One trader explained that because the “fundamentals of [Compound’s] ‘governance’, given the public information, don’t make too much sense today,” a drop under $100 is likely:

“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.”

See also: Technical pattern suggests Bitcoin is ready to push towards $14,000

His sentiment boiled down to the fact that companies that accomplish what Compound does are valued far below the market capitalization of COMP.

ALTCOINS ARE VERY UNLIKELY TO BENEFIT IF BITCOIN AND ETHEREUM UNDERGO FURTHER VOLATILITY

Further volatility in the price of Bitcoin could further suppress altcoins, including Compound.

Nik Patel, the author of “An Altcoin Trader’s Handbook,” recently said on the outlook for altcoins in the current environment:

“Wouldn’t surprise me to see dominance now rise until BTC all-time highs (pending a confirmed Weekly breakout above $10,600) > break $20k and alts find another bottom (like Nov/Dec 2016) > they rally concurrently like March-June 2017.”Ethereu!

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Fidelis James is a Nigerian. An aspiring student of the Nigerian Maritime University, in the field of mechanical engineering. He is also loveable writer and a business minded individual.

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