COMP, THE native token of Compound Finance, has seen its market price rise significantly on Wednesday, emerging as the top gainer of the day. According to data from CoinMarketCap, COMP is up by 13.24% in the last 24 hours as the bulls increase their control of the market.
Initially, COMP began the week with a bearish trend, declining by 16% to trade at $59.14 on Tuesday. However, after touching this price level, the token began showing signs of recovery moving its market price to $62.34 at the close of Tuesday’s market.
In the early hours of Wednesday, COMP gained over 11%, hitting a price of $69.84, and has since been hovering around that price region. Looking at its broader price movement, COMP has recently been among the most popular tokens, gaining over 90.55% in the last four weeks.
COMP Price Analysis And Prediction
According to Compound’s daily chart, its Moving Average Convergence Divergence (MACD) has crossed below its signal line, indicating a bearish trend may soon occur. Based on its current price movement, COMP is currently consolidating around the $69.70 price zone.
Related Reading: Compound (COMP) Token Rallies Over 100% After CEO Quits – Details
If COMP bulls are able to significantly strengthen their grip on the market, the DeFi coin may break out of this zone, trading as high as $78.67. This indicates a potential 12% on its current market price.
On the other hand, if the bears reassume market control, COMP is expected to retest at $55.72, which marks its imminent major support level. However, with significant selling pressure, COMP could trade as low as $22.97.
It is worth stating that traders should watch out for the impending Fed interest rate announcement, which may likely play a role in the token’s short-term price movement.
At the time of writing, Compound is changing hands at $69.41, with a 0.89% gain in the last hour. The token’s daily trading volume is valued at $186.71 million, having gone up by 31.28%. With a market cap of $541.25 million, COMP ranks as the 71st largest cryptocurrency.
Compound (COMP) Trading At $69.70 On The Daily Chart | Source: COMPUSD Chart On Tradingview.com
Fed Interest Rate Decision Approaches
In other news, the crypto space and the general financial markets are anticipating the interest rate decision by the United States Federal Reserve (Fed) on Wednesday.
It is widely expected that the American apex bank will announce a 25 basis points rate hike, bringing the current interest rate to 5.5%. This would mark the 11th rise in the Fed’s interest rate since early 2022.
Related Reading: Upcoming Interest Rate Hikes Could Be The Next Big Challenge For Bitcoin, Here’s Why
An increase in interest rates is generally executed to combat inflation. However, interest rate hikes are also known to produce a negative effect on cryptocurrency prices as it reduces spending and investment ability.
Following the last interest rate hike by the Fed in May, Bitcoin dipped by 1%. In April, the market leader significantly declined by 3% after the Fed announced a similar 25 bps rate increase. So another hike will likely lead to a further decline in price.
Featured Image From Freepik, Chart From Tradingview.