You are about to read the comprehensive Compound price prediction, which describes the current occurrences on the COMP market and offers an exclusive forecast that covers the period from 1 to 5 years. It's the result of an extensive market analysis carried out by our experts, combined with the showings of our proprietary AI-enhanced indicator dubbed the Crypto Volatility Indexs (CVIX), the operating principles of which will be duly explained later.
Compound is a low-ranked cryptocurrency currently priced at $43.68 that belongs to the class of minable coins, with a market capitalization of $317 430 589.
Over the past few years, cryptocurrencies, including Compound, established a strong foothold in the global financial world and are now being traded on par with traditional assets like stocks, commodities, and foreign currencies (Forex).
Some institutional investors even consider crypto as an efficient hedging instrument against the soaring inflation and the turmoils in the global economy. Retail investors and traders are interested in cryptocurrencies such as COMP because this is arguably the most accessible financial market where numerous assets have the potential for 100X to 1000X gains in a relatively short period of time. These returns are unattainable in other markets, which is the reason why most conservative investors are carefully supplementing their existing portfolios with cryptocurrencies like Compound, while the forward-thinking ones devote a significant portion of their capital to this rapidly-developing asset class.
This is obviously a wise approach since the global economy is in a state of permanent crisis while the traditional markets are bending to the will of high and mighties. The conventional stores of value - fiat currencies like USD or precious metals like gold - can't be relied on anymore, so more and more people are turning their eyes to cryptocurrencies in general and COMP in particular. This Compound price prediction has the purpose of helping you become an even more progressive trader or investor and achieve the following goals:
- Diversify the investment portfolio by supplementing it with the best representatives of this asset class;
- Mitigate the risks associated with the market that is still in the formative stage;
- Get a better understanding of both the ongoing situation on the cryptocurrency market and its prospects in the long run;
- Make informed and carefully weighted decisions about the necessity of adding certain coins or tokens to the portfolio;
- Help investors decide on the duration of holding of a certain cryptocurrency in the portfolio since some coins or tokens are suitable for long-term holding (up to a decade) while others are more suitable for short-term investment (no longer than a year);
- Create the possibility for the consistent growth of your equity curve and net worth through investment in cryptocurrencies while avoiding being stuck with the annual ROI of meager 3% - 5% while your crypto-oriented peers could be swimming in money like Scrooge McDuck;
- Improve the market timing and avoid the classic mistake of buying an asset at the top of the upswing and selling it when the rest of the market participants are panic selling while being blinded by the FUD.
However, being invested in COMP or other cryptocurrencies isn't the walk in the park. It's necessary to follow the cryptocurrency markets vigilantly and react to their every whim, which might arise from different fundamental factors like regulatory scrutiny or even a random sell-off. It's a tough task even for full-time crypto analysts and virtually impossible for those who don't consider crypto to be their field of expertise. Therefore, before even considering the investment is COMP or any other cryptocurrency for that matter, you need to understand the realities of this market, as well as the risks and challenges that you will most certainly face when holding digital assets. We have outlined the most crucial of them below.
- The cryptocurrency market is much tougher than stocks or commodities markets because it's characterized by the wild volatility, which is inherent to all maturing markets. In order to be a consistently profitable cryptocurrency trader or investor, you would have to forget about calm and steady trends of S&P 500 or gold and get used to the leapfrogging price action that occurs on all cryptocurrency markets, with the exception of stablecoins.
- One can't disregard the emotional strain that cryptocurrency holding (a slang word for long-term investment) can put even on experienced investors, especially at times of deep and rapid corrections that might occur even during the strongest uptrends and result in 30% - 40% drawdowns that are usually followed by even greater breakouts to the upside. These enormous price fluctuations happen because the overall cryptocurrency market capitalization is still relatively small compared to the capitalization of gold or top U.S. corporations, so it takes significantly less capital to push the price in either direction, especially the price of altcoins with low market capitalization. What's even more nerve-wracking is the speed at which sharp reversals happen in these markets. Sometimes, it takes only a couple of hours for the price to take a nosedive and disrupt the existing market structure. Being involved in crypto requires having nerves of steel (or some other durable material) and high risk tolerance. Otherwise, the possibility of getting caught up in a panic sale or reckless buying caused by the fear of missing out is very high, and it will most definitely threaten the integrity of your investment portfolio.
- Due to the reasons mentioned above, along with such factors as the impact of cybercrime, the ever-toughening regulations, or even state-wide crypto bans, network issues, and hardforks, the price trajectory of certain cryptocurrencies could start moving like a loose cannon on shorter time frames and even fall out of the scope of our price prediction model for a short while. In that case, don't indulge in panic and remember that such vagaries are the normality of the cryptocurrency market - nearly all erratic movements are smoothed out on larger time frames, and the price movement gets back within the confines of our forecast.
- Risk management is most certainly the best remedy against all unfortunate surprises that the cryptocurrency market might bring upon you. Without it, you will be left at the mercy of volatile price swings that could inflict serious damage to your portfolio and leave you stuck in unfavorable markets for a very long time. The proper risk management implies having a stop loss on all positions, the adequate sizing of these positions, the cautious use of leverage, the application of risk/reward ratio, and, of course, the market timing. Remember that even though our COMP price prediction is the most accurate in the industry, it doesn't cancel out the necessity of learning and applying risk management.
Having given you all the preliminary instructions necessary to start creating the cryptocurrency portfolio of your own, or work on improving the existing one, we would like to move to the crux of the matter and offer you the most extensive COMP price forecast that stretches from its current standings to the price levels anticipated in the coming years. It's the result of the ceaseless work of our analysts and live readings of our unique Crypto Volatility Index, a highly efficient symbiosis that will help to open the readers' eyes to a bigger picture in the Compound market and make a sound investment decision.
At this particular junction, the efforts of all market participants brought the price of Compound to the level at $43.68 where it currently sits. As already mentioned, COMP is a low-ranked cryptocurrency because it presently occupies the 86th place in global cryptocurrency rankings, the metric that is determined by multiplying the current price by the market capitalization of the digital asset. In the case of Compound, the market capitalization stands at $317 430 589 - the importance of this parameter will be explained later.
Our price prediction algorithm is designed in such a way that it continuously monitors both the price, the rank, and the market capitalization of the digital asset in question to provide our subscribers with the most accurate information on the current state of the market and its future prospects that allows the recipients to adequately assess the state of their portfolio and decide whether or not it needs to be reconfigured. Our algorithm also pays special attention to historical data, which is indispensable for the correct estimation of both current and expected market structure and the assessment of its present and future direction. Below you will find key excerpts of this historical data so that you too could have an understanding of where the Compound market is heading.
- Yesterday, on March 22, COMP was valued at $45.67 at the turn of the two trading sessions - remember that cryptocurrencies are traded 24/7, so every trading session symbolically ends at midnight. The price change, percentage-wise, over the said period amounted to -2.25%.
- A week ago, on March 16, Compound was traded at $42.73 at the close of the trading session, marking the 0% price shift from that close to its present position.
- On February 23, which was exactly a month ago, the speculators traded COMP at $57.82, the price level that is at the distance of -24.45% from where it currently stands.
The combination of this data with the analysis of the price chart on different time frames, preferably the ones that are higher than the 4-hour time frame, should give you a clear comprehension of the present situation on the COMP market and how it has been developing. But this is only the tip of the iceberg with regard to the amount of data that our algorithm sifts through every day and pieces together every bit of valuable information to produce the most precise short-, mid-, and long-term Compound price prediction that has become the foundation for many profitable trading strategies and swollen (in the sense of them being profitable) investment portfolios.
If you are a first-time reader, consider this COMP price forecast as the guideline for the composition of your personal own cryptocurrency portfolio through the assessment of the potential of a given cryptocurrency. And if you already have a portfolio or a trading strategy built around this price prediction model, continue using it as a frame of reference. Each time you notice a discrepancy between the predicted market development and the actual price, consider taking action depending on the ongoing market condition: add to the position if the price dips below the permissible boundaries or consider offloading a part of the position if it goes above that boundaries, but always check your intentions with CVIX, the operating principles of which will be explained later.
First, we would like to offer the short-term price prediction of up to 12 months going forward, which would be perfect for creating the strategies if you adhere to any trading style except for scalping, a trading style which implies that you hold the position for no longer than a couple of hours. This forecast would even be of some service to day traders whose trading approach is built around trend following. But the chart below and the prediction itself would be of great use for swing and positional traders who intend to hold the coin like COMP for days if not months.
The Compound price prediction wouldn't be complete without the explanation of the origin and the designated use of the Crypto Volatility Index that forms the backbone of this forecast model. As already mentioned, CVIX is the brainchild of our analysts and software developers, who have spent tons of time working on a perfect solution for assessing the anticipated market volatility and putting it in some visual form. Moreover, the indicator incorporates the state-of-the-art deep learning algorithm that scans and analyzes literally terabytes of historical market data so that our subscribers could enjoy having the most concise, apprehensible, and, most importantly, accurate COMP price forecast that would help them stay ahead of the curve for years to come.
Key facts
- The foundation of the CVIX lies in the classic stock volatility indicator dubbed the Market Volatility Index (VIX) that first saw the world in the late 80s and had subsequently been adopted by traders and analysts from the Chicago Board Options Exchange that was later rebranded to Cboe Global Markets. Those of our readers who trade stocks know that this platform accommodates only the finest time-tested trading instruments. Initially, this indicator was used to assess the market sentiment and forecast the volatility for the next 30 days, and it worked particularly well with the S&P 500 index. But the realities of cryptocurrency trading differ significantly from that of stock trading, so our developers had to recalibrate it to meet the demands of the volatile market.
- The recalibration resulted in CVIX becoming a more versatile indicator in terms that it is capable of gauging the volatility and forecasting the price shifts over many months - the latest updates made CVIX capable of anticipating the market behavior over the next few years, as you already saw in the 5-year price prediction above.
- CVIX offers three volatility modes: red, yellow, and green, which showcase different expectations with regard to volatility and the scope of market movement. The red mode, which stretches from 61 to 99, hints at the extreme volatility; the yellow one (31 to 60) is seen during the period of medium-high and medium volatility; the green mode suggests the lowest volatility (1 to 30) that is seen during flat or ranging markets or on the stablecoin markets.
- When CVIX is red, it means that the market could get violently volatile with enormous price swings that could occur to both the upside and the downside. Obviously, the red CVIX implies that putting money in COMP or any other cryptocurrency for that matter is very risky at that point in time - it's better to wait until the volatility wears off. But if you do feel the urge to enter the market, exercise an iron discipline with regard to risk management, which means no mental stop losses, dial down on the position size significantly, and consider increasing the risk/reward ratio.
- At times when CVIX shows yellow, the volatility remains quite strong but not extreme, which might be deemed as a good period for some swing trading if you catch the market at consolidation and right before the breakout in either direction. In that case, an experienced cryptocurrency trader could engage with a large stack, pull the stop loss closer to the determined support/resistance levels and consider trading with the risk/reward ratio of 1:3.
- The green CVIX is associated with the calmest markets that don't showcase any considerable swings - those markets are most often in the ranging or consolidation mode. The green CVIX is commonly seen on the stablecoin markets, but COMP and other cryptocurrencies can turn green from time to time too. This also might be a good time to increase the size of the crypto portfolio in anticipation of a breakout. Mental stop losses are acceptable in these conditions, along with larger entries, but don't get your hopes up too high with regard to the risk/reward ratio. When CVIX is green, you won't get a reward larger than 1:1.5.
The price of COMP and the readings of CVIX are not the only metrics that we use when drawing the price predictions. Market capitalization is another important metric that helps traders determine the popularity of the cryptocurrency in question as well as its future prospects. It's also used to assess the share that Compound holds within the entire cryptocurrency market. The formula for the calculation of market capitalization is rather simple: the circulating supply of the currency in question is multiplied by its current price. As of the time of writing, the market capitalization of COMP stands at $317 430 589, enough to name it the 86th largest coin on the cryptocurrency market.
- Yesterday, on March 22, the market capitalization of Compound stood at $331 855 863.
- A week ago, on March 16, the capitalization of COMP was $310 518 276.
- A month ago, on February 23, the amount of capital flowing around this particular market amounted to $420 156 674.
Most cryptocurrency investors adhere to the principle that market capitalization also determines the risks associated with a certain cryptocurrency and its ability to withstand turmoils which are the common occurrence on this highly volatile market.
- Large-cap
- Large-cap cryptocurrencies have a market capitalization of $10 billion or more. They are considered to be a relatively safe bet in both short-and long-term perspectives because of the sheer amount of capital that had been poured into them, which makes them more resilient to flash crashes. These are the low-risk cryptocurrencies.
- Mid-cap
- Mid-cap cryptocurrencies with capitalization from $1 billion to $10 billion are most suitable for those who want to take a shot at significant profits while keeping the risk at bay. This is the class of medium-risk cryptocurrencies.
- Small-cap
- Small-cap cryptocurrencies with a market capitalization of less than $1 billion are the riskiest of the bunch, but at the same time, they hold the potential for mind-blowing profits. But beware that those digital currencies are also the weakest when the prices are falling through the floor. Digital assets with this kind of capitalization belong to the high-risk category.
It's clear that the aforementioned market capitalization of Compound allows to classify it as the small-cap cryptocurrency that belongs in the low-risk group. Since we have already mentioned the formula for calculating the market capitalization, it would be appropriate to devote a portion of this report to the supply of COMP. For your information, there are three types of supply for virtually every cryptocurrency: the maximum supply, which means the number of coins that would be generated on a particular blockchain throughout its existence; the total supply, which refers to the number of coins already produced since the inception of the project; the circulating supply which obviously refers to the number of coins in circulation, in other words, that are being actively traded on exchange platforms.
- The maximum supply of Compound is 10 000 000 COMP;
- The total supply of COMP currently stands at 10 000 000 coins.
- The circulating supply of the cryptocurrency under review is 7 267 152 COMP.
This Compound price prediction wouldn't be complete without the overview of the trading volume on the market in question since it's the metric used by virtually all cryptocurrency traders to confirm the strength of the trend and the viability of a market move. For instance, if the breakout to the upside is occurring on the back of the low trading volume, there is a high probability that this move is unsustainable and would result in a bullish trap. Therefore, it's important to analyze the past and the current trading volume of COMP in order to understand whether this market possesses an underlying strength.
- Over the past 24 hours, the trading volume on the Compound market was registered at $30 308 327.
- Yesterday, on March 22, COMP had a trading volume of $24 874 332.
- A week ago, on March 16, the average daily trading volume on that market amounted to $38 694 235.
