Conflux Network (CFX) is up nearly 500% in the past week, with CFX emerging as one of the best crypto assets of 2023 as China appears to be heating up for cryptocurrency trading.
What is a Conflux Network?
Interestingly, Conflux Network, also known as Shanghai Tree-Graph Blockchain Research Institute, is the only regulatory, public and permissionless blockchain in China. Conflux is a layer-1 blockchain that operates on a hybrid proof-of-work and proof-of-stake mechanism.
The CFX price has rallied nearly 1.335% year-to-date (YTD) to reach $0.3254 on February 24, the highest level in 14 months. In comparison, the combined market capitalization of crypto assets has grown by approximately 45% YTD.
Why is the price of Conflux Network increasing?
Strong fundamentals in particular drove CFX prices higher in 2023.
For example, the price of CFX increased by more than 90% on January 26, two days after Conflux Network partnered with Little Red Book, a social media platform based in China, to provide a nonfungible token service.
The partnership allows Conflux Network to bring its services to Little Red Book’s 200 million users.
In addition, on February 15, Conflux Network partnered with China Telecom to develop and pilot a blockchain SIM card service (BSIM) in Hong Kong, thereby gaining exposure to the latter’s 350 million users. The price of CFX has rallied 450% after the announcement.
High-profile deals also help boost queries for keywords related to the Conflux Network, thus signaling growing retail interest. For example, the worldwide Google Trend score for the keyword “Conflux Network” reached 93 and 100 in the period 22-28 January and 12-18 February.
Social media is mostly focused on Conflux Network’s major partnership deals, according to data from Santiment shows below.
In addition, the CFX market bulls also came before the vote on the token burning proposal this week.
ℹ️ Did you know Conflux Foundation has burned almost 500 Million CFX?!
‼️ The latest DAO proposal CIP-107 on token burning is coming next week!
Read the full proposal here ⬇️https://t.co/zqZwmXUSWn pic.twitter.com/1odqgJEbOh
– Official Conflux Network (@Conflux_Network) February 14, 2023
So far, the buzz for Conflux Network is palpable. However, this does not protect the price of CFX from undergoing a major correction in the coming weeks.
CFX price rally “overbought”
From a technical point of view, the continued boom in CFX prices has resulted in severe overbought.
On the daily and weekly charts, the CFX relative strength index has exceeded 70, which indicates that the continuous uptrend is about to be exhausted. Additionally, the Conflux Network token is testing the $0.28–$0.41 range as resistance, which is the support from May to November 2021.
A pullback from the resistance area could have the CFX price falling to $0.097–$0.141 as the primary downside target. The range also coincides with the token’s 50-week exponential moving average (50-week EMA; red wave) near $0.108, down about 65% from the current price level.
On the contrary, a decisive breakout above the $0.28–$0.41 range could have the CFX price rally to $0.84, the 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 do their own research when making decisions.