Social media metrics show strong retail investor sentiment behind the ongoing CFX price rally.
Conflux Network (CFX) is up nearly 500% in the past week, with CFX emerging as one of the best-performing crypto assets in 2023 as China appears to be warming to cryptocurrency trading.
What is Conflux Network?
Interestingly, Conflux Network, also known as Shanghai Tree-Graph Blockchain Research Institute, is the only regulatory-compliant, public and permissionless blockchain in China. Conflux is a layer-1 blockchain operating on a hybrid proof-of-work and proof-of-stake mechanism.
CFX’s price has rallied nearly 1,335% year-to-date (YTD) to reach $0.3254 as of Feb. 24, its highest level in 14 months. In comparison, the combined market capitalization of crypto assets has surged approximately 45% YTD.
Why is Conflux Network’s price rallying?
Strong fundamentals have primarily driven the CFX price higher in 2023.
For instance, CFX’s price increased by more than 90% on Jan. 26, two days after Conflux Network partnered with Little Red Book, a China-based social media platform, to provide nonfungible token services.
The partnership enabled Conflux Network to bring its services to Little Red Book’s 200 million users.
Similarly, on Feb. 15, Conflux Network partnered with China Telecom to develop and pilot a blockchain SIM (BSIM) card service in Hong Kong, thus gaining exposure to the latter’s 350 million users. CFX’s price has rallied 450% after the announcement.
The high-profile deals also helped boost queries for keywords related to Conflux Network, thus hinting at an increasing retail interest. For instance, the worldwide Google Trend score for the keyword “Conflux Network” reached 93 and 100 in the Jan. 22–28 and the Feb. 12–18 periods, respectively.
Social media was mostly focused on Conflux Network’s major partnership deals, according to data from Santiment show below.
In addition, the CFX market bull run also comes ahead of the vote on its token burn proposal sometime this week.
ℹ️ Did you know the Conflux Foundation has already burned close to 500 Million CFX?!
‼️ Our latest DAO proposal vote CIP-107 regarding token burning will be taking place next week!
Read the full proposal here ⬇️https://t.co/zqZwmXUSWn pic.twitter.com/1odqgJEbOh
— Conflux Network Official (@Conflux_Network) February 14, 2023
So far, the buzz for Conflux Network is palpable. However, that does not safeguard CFX’s price from undergoing a massive correction in the coming weeks.
CFX price rally is “overbought”
From a technical standpoint, CFX’s ongoing price boom has left it extremely overbought.
On both daily and weekly charts, CFX’s relative strength index has crossed above 70, which hints that its ongoing uptrend is near exhaustion. In addition, the Conflux Network token is testing the $0.28–$0.41 range as resistance, which served as support from May to November 2021.
A pullback from the resistance area could have CFX’s price fall to $0.097–$0.141 as its primary downside target. The range also coincided with the token’s 50-week exponential moving average (50-week EMA; the red wave) near $0.108, down about 65% from current price levels.
Conversely, a decisive breakout above the $0.28–$0.41 range could have CFX’s price rally toward $0.84, its resistance from the May–September 2021 session.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.