Compound (COMP) was introduced to the cryptocurrency market in 2020. Originally founded by Geoff Hayes and Robert Leshner in 2017, Compound is a lending protocol where users can lend and borrow cryptocurrency. COMP is the native ERC-20 type governance token of the Compound protocol, and COMP holders can propose and vote on changes concerning all operations of the protocol.

Compound is a part of the booming sector of DeFi (decentralized finance), and its utility in this space is one of the factors that define Compound price in the cryptocurrency market. As an efficient DeFi protocol for lending, Compound allows users to borrow crypto from lenders who can deposit their funds and earn interest on loans, creating a blockchain-based finance ecosystem.

But what are the factors that determine the value of COMP? If you’ve ever wondered this, then you are in the right place. We’ve gathered all the info you need in order to get a better understanding of Compound price and the factors that influence it.

Compound Price History

The price of [guidelink comp] (COMP) has gone from lows of $61 to highs of $566, which shows the full extent of volatility in the cryptocurrency market. Due to these high volatility levels, COMP price can go through radical changes, swinging between peaks and troughs in accordance with market trends and a multitude of factors that influence the value of Compound and other cryptos.

Even though the Compound protocol was created in 2017, COMP didn’t join the cryptocurrency market until June 2020. It is still therefore a rather young project, but also a valuable one, judging by the utility and price of the COMP token. In the first week of trading, COMP price recorded an all-time low (ATL) of $61 on June 18, 2020. This was below its starting value of $78 the day before. However, Compound soon headed higher and recorded an increase of over 50% in a single day to reach the price of $149. Compound price kept following this upward trajectory, once again making a major leap in 24 hours to trade at a new high of $220. This bullish movement had occurred not long after COMP began trading, reminding traders and crypto investors of the high volatility levels and major fluctuations that characterize the crypto market. In this case, fluctuations brought major gains.

By June 22, 2020, the first trading month for Compound, COMP price reached the value of $336, which was a new high for the crypto. The trend was immediately exhausted after this peak and the coin entered a bearish phase. With new dips, COMP price dropped below the $300 support level, losing its previously earned value in the last week of June 2020. The bearish trend prevailed despite several changes in the price momentum, so COMP fell to new lows at $200 on July 2, 2020. August of the same year recorded further lows for COMP price at $127, while November tested the support levels at $100. The price of COMP dipped below $100 in November to trade at $94. This wasn’t for long, however, as Compound showed signs of rebounding in December, albeit with evident price fluctuations. The lowest COMP price in December was $112 and the highest was $177, recording a price difference of 32%. Trading volumes also improved that month compared with September, October, and November.

The year 2021 brought new highs for COMP price, and the value increased by 136%, allowing Compound to reach a new high at $346. A bullish January provided strong positive momentum for COMP so that the crypto could reach a new all-time high (ATH) of $566 in February 2021. After reaching its ATH, COMP price dipped by 19% in two months. Between Compound’s ATL and April 2021 the price of COMP made gains of over 600%.

Will the price of COMP keep dipping below its ATH or is there a chance it will reach a new all-time high? No one can predict the future exactly but looking to the past can sometimes provide insight.

Analyzing Compound’s Price History

Compound’s price history can be analyzed with the same tools and techniques as stock market analysis. Technical analysis, sentiment analysis, and fundamental analysis are crucial techniques that can be used to investigate price history and predict future price changes.

Technical analysis involves examining price charts and market data to delve into the economics of the COMP token and its market value. The max supply of Compound is limited to 10 million COMP, which makes the token somewhat scarce when compared to Bitcoin’s supply of 21 million. As COMP has a capped supply, any change in demand for the token will affect its price. Out of Compound’s 10 million total supply, only 4.2 million COMP tokens will be distributed to users, which will happen over the course of 4 years. As the price varies, the market cap also changes in response, and we can use technical analysis to make sense of these fluctuations.

Fundamental analysis studies the activity of the company and the dev team behind Compound, as well as operations on the Compound protocol which affect the price of COMP in the market. Fundamental analysis also considers the intrinsic value of COMP through its utility and demand.

Sentimental analysis weighs opinion data collected from the internet, ranking sentiment in the market for a certain crypto as negative, positive or neutral. Sentiment can also affect COMP price momentum, and in combination with technical and fundamental analysis can provide information for forming a COMP price forecast.

The general trend noted in the movement of Compound price reveals major fluctuations and sudden dips and rises with changing market cycles. In such a market, a period of great hype may take COMP to new highs until exhaustion results in trend reversals. At that point, the hype is followed by a bursting bubble, and as a result the price plummets.

Factors Influencing the Price of Compound (COMP)

A multitude of specific factors can influence the price of Compound (COMP). Compound has a limited supply unlike fiat currencies, which acts as a prevention against inflation. After the total supply of 10 million COMP is in circulation, no new COMP tokens will be minted, which means the value of COMP is influenced by its scarcity.

The price of Compound can also respond to systematic changes in the market, which means that it may react to general trends followed by the entire market, positive or negative. News and project developments, upgrades and updates, partnerships, and newly added functionalities can also affect the price of Compound. Additionally, the overall adoption and use of COMP can impact the market value and increase the demand for this crypto.

Live Compound Price and Market Cap

The live price of Compound is in constant flux and is perpetually changing to match active market trends, as it is decided by the balance of buying and selling activity. Given that the cryptocurrency market is a highly volatile environment, COMP price can experience major changes within a short period.

Compound Price FAQ

How is the price of Compound calculated?

Compound’s price at any given time is decided by the balance of supply and demand on exchanges, while its market cap is the price multiplied by the number of coins in circulation. The price of COMP is subject to constant changes in accordance with the high levels of volatility in the crypto market, which means that the market cap also varies accordingly.

Why is the price of Compound different on various exchanges?

COMP price won’t be the same on every exchange as the price depends on trading volumes and the buy and sell activity of traders and investors, which varies from one exchange to another. Although the difference in the price of the same asset isn’t great, some traders may earn additional profit on that difference by simultaneously trading COMP or other cryptos on more than one exchange.

Conclusion

COMP price has been through major changes since it started trading on the crypto market in June 2020. Between its initial lows of $61 and its recent highs of nearly $600, traders and holders have managed to make a profit as well as taking advantage of COMP’s utility in the DeFi market and crypto loan systems.

Compound price keeps changing with market cycles and in accordance with defining factors that influence its value. It has the potential to meet new highs and retest support and resistance levels.

If you want to get started with the most user-friendly trading experience on the market, register with Kriptomat today to begin your journey into the world of Compound and cryptocurrencies!