The cryptocurrency associated with Convex Finance, known as CVX coin, experienced a notable 20% surge in value within a day, a sudden spike believed to have been instigated by a significant bid from a large investor.
Reports suggest that a profitable whale in the CVX market placed a bid of $2 million (equivalent to 709961 CVX), leading to a remarkable 61% price increase shortly thereafter.
According to insights from SpotOnChain, this particular whale was involved in trading 1.098 million $CVX from July 2021 to March 2022, resulting in a substantial profit of $20.2 million (+129%) from the initial trade.
This recent trade, which marked the whale’s second active involvement in about two years, hints at a potential further increase in the value of CVX.
What Lies Ahead for CVX Coin?
Analysts observing the chart patterns of CVX coin have identified a descending wedge formation stemming from its price movements in 2024. The significant breakout rally of over 80% might just be the beginning for CVX.
In many instances, a breakout from this type of pattern tends to lead to a surge in value similar to the wedge’s height.
If this traditional scenario unfolds, it could potentially push the price of CVX to $5, reflecting a substantial 134% increase in value.
Another perspective is that a retracement to address the price disparity and the fair value gap could present an attractive buying opportunity for investors eyeing the $5 target.
Nevertheless, the current price momentum shows signs of being overheated, as indicated by the Stochastic RSI. Therefore, any forthcoming declines might provide an excellent opportunity for interested buyers to join in for another potential upswing.
However, a retreat back to the wedge pattern could challenge the optimistic outlook for CVX.
Spot Market Dominance Prevails
The recent price surge was primarily fueled by the strong demand in the spot market, as evidenced by the Cumulative Volume Delta (CVD) Spot indicator. This metric assesses the difference between buying and selling volumes across different exchanges.
The spike in CVD focused on the spot market during the surge, in contrast to Futures, indicated that the buying volume in spot markets exceeded the selling pressure.
At present, short sellers seem to have the upper hand in the market, reflected by the downward trend in CVDs. However, the defense exhibited by buyers around the breakout level of the wedge pattern could potentially signal a bullish reversal worth monitoring.