CFX, the native token of Conflux, has given massive gains of 2000% since the beginning of this year. This rally has turned out very profitable for the investors who saw its potential and accumulated the asset right at the bottom levels
CFX/USDT is trading at $0.1874 after getting a 60% pullback from its swing high which was created back in March. This retracement came after a massive rally of almost 2000%. Such level of price movements indicates that this digital asset is highly volatile and may not be the cup of tea for investors with low-risk appetite.
Source: CFX/USDT Binance price chart TradingView
After analyzing the daily chart, we can see that the price is appearing to retrace at the support zones as investors are booking profits. The sellers became active right at the daily resistance level of $0.4294 when the market started to show weakness, as the bulls got tired after continuous buying and were looking to book profits. It is important to note that the price has fallen below the daily 200 EMA which acts as an important level. It is alarming to the investors as there is a potential for a big downfall because of the volatile nature of this asset.
On the upside, the price is at an important demand zone and forming a descending broadening wedge. A reversal from this point has a potential of at least another 800% towards the all-time high price of $1.4831. One of the signs for reversal could be determined by the crossover of RSI and MA towards the upside. This will indicate that the market is about to gain its strength back. Although investors must consider several other factors before investing.
Source: CFX/USDT Binance price chart TradingView
According to the 4H Chart, Conflux is in a minor downtrend as the price is creating a bearish market structure and is trading below 200 EMA. The price is currently taking support from the daily support level. If we look closely, the price has formed a descending broadening wedge pattern. It is a sign of a potential bullish reversal. If the price breaks the trendline towards the upside, a potential move of 50% can be expected. Investors with a Low-risk appetite should follow proper risk management as this asset is very volatile and risky.
As the trend is bearish there is an equal probability of downside. If the bulls are unable to defend the level of $0.1760, the bears can push the price down almost 22% until it finds support at $0.1338.
The RSI indicator is currently at 52.96 and the RSI has crossed the MA line towards the upside. This can indicate a slightly bullish or sideways momentum.
The MACD indicator made a bullish crossover suggesting the bears are taking a break. However, it is still below the 0 line and investors must remain cautious.
As it is observed, on the 4hr, the price is trading below the 200 EMA(exponential moving average) which acts as a significant resistance. This clearly indicates a downtrend where the sellers are in control and for a trend reversal, the price must break and trade above the 200 EMA.
Support Levels: $0.1760 – Support 1
$0.1338 – Support 2
Current Price: $0.1874
Resistance Levels: $0.2294 – Resistance 1
$0.3469 – Resistance 2
Conflux, after a big rally, is in a distribution phase. Current price action suggests a minor downtrend and some sideways conditions. This is a natural condition in a trending market. As of now the price is taking support on daily support levels but the investors should be ready with exit plans in case of a total reversal. On the upside, if the market continues its bullish momentum, We can expect the price to test its all-time high of $1.4831.