Conflux Network (CFX) is up almost 500% in the last week, with CFX emerging as one of the top performing crypto assets in 2023 as China appears to be starting to trade crypto.
What is a conflux network?
Interestingly, Conflux Network, also known as the Shanghai Tree-Graph Blockchain Research Institute, is the only public blockchain in China that is compliant with regulations. Conflux is a layer 1 blockchain powered by a hybrid proof-of-work and proof-of-stake mechanism.
The price of CFX is up nearly 1335% YTD (YTD) to hit $0.3254 as of Feb 24, the highest level in 14 months. In comparison, the combined market capitalization of crypto assets has grown by about 45% since the beginning of the year.
Why is the price of Conflux Network going up?
Strong fundamentals drove the CFX price higher in 2023 in the first place.
For example, the price of CFX surged over 90% on January 26, two days after Conflux Network partnered with Little Red Book, a Chinese social media platform, to provide non-fungible token services.
The partnership has enabled Conflux Network to provide its services to 200 million Little Red Book users.
Similarly, on February 15, Conflux Network partnered with China Telecom to develop and pilot a Blockchain SIM (BSIM) service in Hong Kong, thus gaining access to the latter’s 350 million users. The price of CFX has risen by 450% since the announcement.
The high-profile deals also helped boost searches for Conflux Network-related keywords, hinting at growing retail interest. For example, Google Trend’s global ranking for the keyword “conflux network” reached 93 and 100 for the periods January 22-28 and February 12-18, respectively.
According to Santiment’s data below, social media has mostly been focused on large Conflux Network partnership deals.
In addition, the CFX bull market is also leading the vote on the token burn proposal this week.
ℹ️ Did you know that the Conflux Foundation has already burned about 500 million CFX?!
‼️ Our final vote on the DAO CIP-107 token burn proposal will take place next week!
Read the full offer here ⬇️https://t.co/zqZwmXUSWn pic.twitter.com/1odqgJEbOh
— Conflux Network Official (@Conflux_Network) February 14, 2023
So far, the hype around the Conflux Network is palpable. However, this does not protect the CFX price from a major correction in the coming weeks.
CFX price rally “overbought”
From a technical standpoint, CFX’s ongoing price boom has left the company’s stock extremely overbought.
On both the daily and weekly charts, the CFX Relative Strength Index has risen above 70, hinting that the ongoing uptrend is close to exhaustion. In addition, the Conflux Network token is testing the $0.28 to $0.41 range as resistance, which served as support from May to November 2021.
A pullback from the resistance area could see the CFX price drop to $0.097-$0.141 as the main downside target. The range also coincided with the token’s 50-week exponential moving average (50-week EMA; red wave) near $0.108, about 65% below current price levels.
Conversely, a decisive break above the $0.28-$0.41 range could send the CFX price up to $0.84, its resistance in the May-September 2021 session.
This article does not contain investment advice or recommendations. Every investment and trading step involves risk, and readers should do their own research when making a decision.
Credit : cointelegraph.com
