For a while, Conflux [CFX] had been trading in a narrow range since the end of June. Despite facing the risk of breaking below the range in the early days of July and August, the bulls have shown resilience by staging a strong comeback, resulting in a significant gain of 33% in just four days.
Breaking through the three-month resistance barrier at $0.176 indicated a potential move above $0.2 in the near future. The previously stagnant sideways movement has been disrupted, with the bulls now setting their sights on a 40% upward climb.
Potential Targets Post Range Breakout
Typically, after a bearish phase, assets tend to undergo a prolonged consolidation period lasting several months. Such consolidation phases not only offer long-term investors viable buying opportunities but also demand a high level of conviction to weather short-term market volatility.
The breakthrough above $0.176 was accompanied by a surge in trading volume. The Directional Movement Index (DMI) indicated the formation of a robust uptrend, with the positive directional indicator (+DI) comfortably surpassing the 20 level. A further rise in the Average Directional Index (ADX) would signal a favorable environment for buyers.
Moreover, the Awesome Oscillator crossed above the neutral zero line. As a rule of thumb, assets experiencing range formations tend to rally by at least the width of the range. Consequently, a conservative price target for optimistic CFX investors stood at the $0.242 mark.
This target coincides with a resistance level dating back to May. Looking ahead, another significant barrier awaits at $0.265, a level that acted as a formidable resistance point in April.
Optimistic Short-Term Perspective
By September 23, the Open Interest in CFX contracts had soared from $20.9 million to a staggering $45 million within a span of just four days. Although the spot Conflux Volatility Deviation (CVD) experienced a sharp decline recently, its subsequent recovery has lifted the spirits of concerned bulls.
Additionally, the funding rate remained elevated. Cumulatively, these indicators suggest a bullish near-term outlook for Conflux. A potential further surge of 30% to 40% does not seem far-fetched.
However, navigating beyond that range might pose challenges, possibly requiring more time for buyers to orchestrate the next move effectively.
Disclaimer: The writer’s opinions presented here are not intended as financial, investment, or trading advice and should be taken as personal viewpoints only