Compound is software that operates on Ethereum and is a decentralized financial lending (DeFi) protocol that allows users to transfer their crypto into loan groups for access by borrowers.
Lenders then earn interest on the assets they deposit. Once the deposit is made, the Compound will issue a new crypto asset and referred to as a cToken to the lender.
Examples of cToken such as cETH, cDAI, cDAI and so on.
Each cToken can be transferred or traded without hindrance but it can only be redeemed for cryptocurrencies that are initially locked in the protocol.
The whole process happens automatically and is handled by the Compound code.
On the COMP/USDT chart, the COMP price movement is seen to have declined from the all-time high (ATH) at the $ 911 price level to return towards the $ 200- $ 220 support zone.
But at the end of the June market, the $ 200- $ 220 support zone has re-supported the price surge above 100% and re-tested the SBR (support become resistance) level around $ 450.
If the COMP price movement continues to show an uptrend, the price is expected to head to the next SBR level at $ 560 before expectations for a higher spike.
If the price manages to break the SBR $ 560 level, a clearer uptrend will support the price to re -test the ATH $ 911 level.
On the other hand, if the price declines again, the RBS (resistance become support) level of $ 360 will be the main target to be tested again.
The lower decline is expected to retest the next RBS level around $ 300 before heading into the $ 200- $ 220 support zone if the COMP price continues to decline.
As of 4.30pm local time, the COMP price was slightly down around 4% in 24 hours to trade at a price level of around $ 424.
