Conflux (CFX) broke out from an ascending parallel channel.
The $2.60 horizontal resistance area rejected the price.
Will CFX eventually break out, or has it started a bearish trend?
The CFX price increased by 50% in November. While the upward movement continued in the first week of December, CFX has fallen since Dec. 4, after a long-term horizontal area rejected it.
The daily time frame chart shows that CFX broke out from an ascending parallel channel on Dec. 1. The channel had existed for 166 days before that. So, the breakout suggests that the previous gradual upward trend has ended, and a new one with a steeper slope has begun.
However, CFX failed to break out above the $0.260 horizontal resistance area. Rather, it reached it on Dec. 4, created a long upper wick (black icon), and has fallen since. The CFX price may retest the channel before resuming its ascent.
If CFX breaks out above $0.260, the next resistance will be at $0.510, close to the yearly high.
Despite the decline, technical indicators are still bullish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are above their bullish thresholds and have not generated any bearish divergence.
So, the decline may be just a short-term retracement before the upward movement continues.
Dip Before Continuation
The short-term wave count aligns with this prediction. The most likely count suggests that CFX is in wave three of a five-wave upward movement that started in August (white). The sub-wave count is in black, showing an extended third wave.
If this is the case, the CFX price is completing a fourth-wave pullback that could end near $0.22. This would validate the 0.382 Fibonacci retracement support level and the resistance trend line of an ascending parallel channel.
Then, the price could complete sub-wave five at $0.30. This would give the longer-term wave three 1.61 times the length of wave one.
The 12-hour RSI reiterates the importance of the current support level, which has reached 50 from above. So, the price and RSI must bounce for the bullish trend to remain valid.
Critical Support
The CFX price broke out from a diagonal resistance but has yet to break out from its horizontal one.
For the price to sustain its bullish trend, it has to bounce at the $0.220 support and eventually break out above $0.260.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
