Over the recent fortnight, the DeFi sector has emerged as a standout performer, with platforms like Compound [COMP] reaping the benefits. The COMP cryptocurrency saw a remarkable surge of 50% over the last 30 days, climbing from $38 to $74.
Nevertheless, the upward momentum faced a significant barrier at around $80K. The question now arises: will COMP manage to overcome this obstacle and aim for the $100 threshold it previously surpassed back in early 2024?
Challenges at the $80 Mark for COMP Token
According to the weekly chart analysis, a bearish order block (OB) in the range of $71 to $81, highlighted in red, was identified. Typically, such bearish OBs often serve as supply zones utilized by prominent market participants to carry out their transactions.
Although the roadblock was encountered last week, COMP struggled to advance beyond it as the new week commenced, indicating potential profit-taking activities around that level.
Nevertheless, a weekly closure of the candlestick above $81 (the supply zone) could serve as a signal for a probable continuation of the recovery process.
If this scenario unfolds, the $100 psychological barrier may well come into play. However, achieving this milestone would necessitate COMP’s ability to convert the $93 level into a solid support zone for further progression towards $100 and beyond.
While the On Balance Volume (OBV) remained below the peak witnessed in March, indicating a potential for further upside, the Relative Strength Index (RSI) was approaching the overbought region, hinting at a possible period of consolidation.
Bullish On-chain Indicators
Insights from Santiment data highlighted that the ongoing surge in COMP was predominantly fueled by robust accumulation through spot buying pressure, evident from the increase in Supply outside of Exchanges (marked in red).
Notably, the selling pressure on centralized exchanges (CEXes) plummeted further, as reflected by the diminishing supply on exchanges (depicted in blue). This shift suggested that COMP might encounter fewer obstacles in its journey to surpass the prevailing roadblock.
This current scenario differs notably from the situation during the local peak in early 2024 when demand waned, and selling activities intensified. This contrast implies that the upward trajectory might persist unless accumulation decreases and selling pressure mounts significantly.
Another favorable on-chain signal stemmed from a surge in whale activities. Unless these whales are offloading their holdings, the heightened interest from large holders could potentially boost COMP’s value.
To summarize, the upward momentum of COMP may continue amidst the DeFi resurgence and the diminishing sell pressure from centralized exchanges.
Disclaimer: The content provided is the author’s personal opinion and does not constitute financial, investment, trading, or any other form of advice.