Markets

Conflux (CFX) price support holding up, but how much longer?

Conflux (CFX) price has declined since its yearly high and created a lower high, which is a sign of weakness.

CFX is trying to hold above the $0.325 horizontal support area. Will it be able to do so, or will the rate of decline accelerate further?

Conflux price is holding above the support level

Conflux price has been declining since it reached a yearly high of $0.49 on March 19. The price created a lower high and is now trading inside the long-term horizontal support area at an average price of $0.32. The area acted as resistance before the breakout, which led to a yearly high. After horizontal resistance levels are broken, they usually provide support once the price returns to them. Therefore, whether CFX rebounds or breaks down from this area will be crucial in determining the future direction.

The daily RSI indicates that the price will collapse. Traders use the RSI as a momentum indicator to assess whether the market is overbought or oversold and to determine whether to accumulate or sell an asset. If the RSI reading is above 50 and the trend is up, the bulls still have the advantage, but if the reading is below 50, the opposite is true.

CFX/USDT daily chart. source: TradingView

There are two reasons why this trend is down. First, the index fell below 50. As shown above, this is a sign of a downtrend. Secondly, there is a bearish divergence trendline still in effect (green line). This means that the increase in momentum did not accompany the previous increase in price. As a result, it indicates that the price of CFX will decrease. The next closest support area is at $0.16.

CFX Price Prediction: Rebound or Breakdown?

Technical analysis from the short-term six-hour time frame provides a bearish forecast for CFX price.

Since the aforementioned yearly high, CFX price has been trading inside a bearish parallel channel. When the price action is contained within this channel, the price bounces between the resistance and support lines of the pattern several times.

Since Conflux price is now trading below the center line of the channel, a drop in the support line is the most likely outlook.

This is also supported by the Relative Strength Index (RSI), which is below 50 and decreasing.

The channel support line also coincides with the 0.618 Fibonacci retracement support level at $0.27. Fibonacci retracement levels work on the principle that after a significant price change in one direction occurs, the price will partially correct or revisit the previous price level before resuming in its original direction. Therefore, due to this confluence, it is likely to act as a local bottom.

Conflux (CFX) price predictions
Six hour CFX/USDT chart. source: TradingView

However, if CFX price regains the center line of the channel, this will invalidate the bearish CFX price prediction. In this case, the most likely scenario would be an increase in the channel resistance line.

For the latest cryptocurrency market analysis from BeInCrypto, click here.

Disclaimer

In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.

Leave a Reply

Your email address will not be published. Required fields are marked *