Conflux Network (CFX) has rallied nearly 500% in the past week, making CFX one of the best performers in 2023 as China appears to warm to cryptocurrency trading.
What is Conflux Network?
Interestingly, Conflux Network, also known as the Shanghai Treemap Blockchain Research Institute, is the only regulated, public and permission-free blockchain in China. Conflux is a layer 1 blockchain that combines PoW and PoS.
CFX prices are up nearly 1.335% year-to-date (YTD), hitting a 14-month high of $0.3254 on February 24. In contrast, the total cryptocurrency market capitalization has only increased by about 45% so far this year.
CFX 4-hour price chart | Source: TradingView
Why is the price of CFX going up?
Strong fundamentals will mainly drive CFX prices higher in 2023.
For example, CFX jumped more than 90% on Jan. 26, two days after Conflux Network partnered with Chinese social media platform Xiaohongshu to offer NFT services.
The partnership creates an opportunity for the network to bring its services to the 200 million Xiaohongshu users.
Daily CFX Price Chart | Source: TradingView
Likewise, on Feb. 15, Conflux Network teamed up with China Telecom to develop and test a blockchain SIM card (BSIM) service in Hong Kong, thereby reaching China Telecom’s 350 million users. The price of CFX jumped 450% after the news was announced.
Premium deals also helped drive the number of keyword queries related to Conflux Network, indicating growing interest among retailers. For example, the keyword “Conflux Network” had a global Google Trends score of 93 and 100 between January 22-28 and February 12-18, respectively.
Interest for the keyword “Conflux Network” over timearound the world | Source: Google Trends
Social media focuses on Conflux Network’s major partner deals, as shown below by Santiment’s data.
Conflux Network’s social media volume | Source: Santiment
Additionally, the CFX market bull run also happened ahead of the vote propose Tokens burn around the week.
So far, the reputation of Conflux Network can be seen. However, this does not protect CFX prices from a sharp correction in the coming weeks.
CFX rally ‘overbought’
From a technical standpoint, CFX’s continued explosive price action leaves it overbought.
On both the daily and weekly charts, the CFX Relative Strength Index has breached the 70 level, indicating that the ongoing uptrend is coming to an end. Additionally, the altcoin is testing the $0.28-$0.41 resistance zone, which will act as support during May 2021 to November 2021.
Weekly CFX Price Chart | Source: TradingView
A pullback from the resistance area could push CFX down to $0.097-$0.141 as the main downside target. The range also coincides with the 50-week exponential moving average (50-week EMA, red wave) around $0.108, which is about 65% below current price levels.
Conversely, a clear break above the $0.28-$0.41 range could push CFX towards $0.84, acting as resistance for the May-September 2021 trading session.
- China Telecom partners with Conflux Network to create BSIM, CFX prices jump 46%
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As reported by Cointelegraph