Liquidations on Compound surpassed those seen on Black Thursday, Compound price increased 16% on the day

By Selena On Jan 12, 2021

At press time, Compound price is trading around $ 196, up 16% over the past 24 hours, recording a 29% increase over the past seven days. If calculated in this direction. liquidations on Compound surpassed those seen on Black Thursday, second only to those seen on Nov 26 when DAI’s price reached $ 1.3.

The daily amount borrowed from Compound also reached a YTD low, falling from over $900 million to just $30 million.

Two signs of the market washing out leveraged players in a healthy correction. pic.twitter.com/0k8zT4mQMo

— Lucas Outumuro (@LucasOutumuro) January 12, 2021

Liquidations on Compound surpassed those seen on Black Thursday, Compound price increased 16% on the day

Compound is a decentralized, blockchain-based protocol that allows its users to lend and borrow cryptocurrencies. The native utility token of this protocol is COMP, which is distributed to all lenders and borrowers on this protocol every day. Every COMP token represents one vote, and anyone who owns at least 1% of the total supply can vote on proposals to change something on this blockchain-based protocol.

Compound is an entirely self-governed blockchain focusing on the financial service that brings the benefits of blockchain in a rapidly expanding DeFi ecosystem.

In less than two months, Compound price has advanced from $ 80 above $ 200 and for now, there is no fear of the bear market. Rising above $ 220 supports the continuation of the bullish trend, but when the price falls below $ 180, it would be a strong sell signal.

And now, at $ 195, many people are starting to get nervous.

COMP/USD 4-hour chart | Source: TradingView

Still, with liquidations on Compound surpassing those seen on Black Thursday, according to Lucas Outumuro, Senior Analyst at Into The Block, supports the thesis that the market had been over-leveraged in the recent price run-up. The daily amount borrowed from Compound also reached a YTD low, falling from over $ 900 million to just $ 30 million.

Two signs of the market washing out leveraged players in a healthy correction.

All major cryptocurrencies are advancing this trading week, and this situation also supports the price of COMP. Some analysts say that the cryptocurrency market has entered a bubble, while some analysts think that Bitcoin could dethrone gold as a store of value to hedge against inflation.

The positive news is that JPMorgan Chase CEO Jamie Dimon said that a cryptocurrency market could advance even more. It is also important to mention Tyler Winklevoss said recently that a current bull run is different from the previous boom because institutional investors started to invest in the cryptocurrencies.

Tyler Winklevoss stated:

“Publicly traded companies like Square and MicroStrategy putting their treasury cash into Bitcoin because they’re worried about the oncoming inflation and the scourge of inflation with all the money printing and the stimulus from the Covid pandemic lockdown.”

Investors in COMP should have in mind that this is a still very risky cryptocurrency, but now could be a good moment to trade Compound (COMP) on Binance, Huobi Global, Binance.KR, OKEx, and BitZ.

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