- The price of COMP rose by more than 80% within a week after that founder Robert Leshner left Compound.
- However, as many begin to take profits, the value of COMP has fallen over the past month.
The value of Composition [COMP] rose 83% a week after the project’s founder, Robert Leshner, left the project and announced the June 28 launch of Superstate. The price of the alt has now lost most of its gains and has plummeted by double digits since the beginning of August.
Read Composition [COMP] Price Forecast 2023-24
At the time of writing, COMP was trading at $56.81. With a 28% drop in value in the past week, it was the crypto asset with the most losses.
Source: CoinMarketCap
Pyrrhic victory after Leshner’s departure
On June 28, Leshner announced his departure from the loan protocol and filed for registration of his new company Superstate. This company will create a short-term government bond fund that uses the Ethereum blockchain as a secondary filing system.
Today I am pleased to announce the formation of a new company, @superstatefunds
Superstate’s mission is to create regulated financial products that bridge traditional markets and blockchain ecosystems.
— Robert Leshner (@rleshner) June 28, 2023
In a recent report tracking the performance of DeFi-related crypto assets, on-chain analytics firm Glassnode noted that COMP and MakerDAO’s MKR were the “two tokens that stand out as primary drivers of this trend.”
The rise in the price of COMP continued through mid-July when it peaked at $82.3. Since then, it has entered a downward trend due to increased profit-taking in the chain.
A look at COMP’s price performance on a D1 chart confirmed the selloff. After the price spike on July 16, COMP accumulation slowed down and most daily traders started unloading their bags.
The main momentum indicators have since trended downwards and were spotted in oversold regions at press time. For example, the alt’s Money Flow Index (MFI) was 27.83. Also far from the midline, COMP’s Relative Strength Index (RSI) was 39.95.
Further, signaling continued liquidity output, the token’s Chaikin Money Flow was negative below the zero line at the time of writing. It is common knowledge that a CMF value below zero is a sign of weakness in the market.
Source: COMP/USDT on TradingView
Most traders have chosen to sell their COMP tokens due to the profitability of the trades in the past month. On-chain data revealed that, on a 30-day rolling average, for every 1 COMP trade that resulted in a loss, there were 1.41 trades that resulted in a profit.
Source: Sentiment
Is your wallet green? Check the compounding profit calculator
May the odds be in favor of the best bettors
The decline in the value of COMP has also been exacerbated by the drop in Open Interest over the past month. Per data from Mint glassOpen Interest is down 47% since the price of COMP peaked.
The futures market has also been significantly marked by negative financing rates, indicating that many have continued to place bets in favor of a fall in the price of COMP.
Source: Coinglass