Conflux, China’s only public blockchain, witnessed the altcoin price skyrocket by 1,300% in 2023. Social media metrics show strong retail investor sentiment behind the ongoing CFX price rally.
What is Conflux Network?
cryptocoin.comAs you’ve followed, Conflux Network (CFX) gained nearly 500% last week. Thus, as China appears to be warming up to cryptocurrency trading, CFX has emerged as one of the best performing crypto assets in 2023. Interestingly, Conflux Network, also known as Shanghai Tree-Graph Blockchain Research Institute, is the only public, permissionless blockchain that complies with the regulations in China. Conflux is a layer-1 blockchain running on a hybrid PoW and PoS mechanism.
The altcoin price increased by approximately 1.335% year-to-date (YTD), reaching $0.3254 as of February 24. This is the highest level in 14 months. In contrast, the combined market capitalization of cryptoassets increased by about 45% compared to YTD.
Why is the altcoin price rising?
Strong fundamentals primarily drove the CFX price up in 2023. For example, on January 26, the price of CFX rose more than 90%, two days after Conflux partnered with Little Red Book, a China-based social media platform, to provide Non-Fungible Token (NFT) services. The partnership enabled Conflux Network to extend its services to the 200 million users of Little Red Book.
Similarly, on February 15, Conflux Network partnered with China Telecom to develop and pilot a Blockchain SIM (BSIM) card service in Hong Kong. Thus, it provided access to 350 million users of the latter. The price of CFX increased by 450% after the announcement.
The high-profile deals also helped boost queries for Conflux Network-related keywords, thus signaling increased individual investor interest. For example, the worldwide Google Trend score for the keyword “Conflux Network” reached 93 and 100 for the 22–28 January and 12–18 February periods, respectively.
Social media focused mostly on Conflux Network’s major partnership deals, according to data Santiment shows below.
In addition, the CFX market bull run also precedes the vote on an interim token burn proposal this week.
So far, the buzz for Conflux Network is palpable. However, this does not protect the CFX price from entering a major correction in the coming weeks.
CFX price rally in ‘overbought’ territory?
Crypto analyst Yashu Gola takes a technical look at the altcoin price. CFX’s continued price boom has put it in an extremely overbought condition. On both the daily and weekly charts, CFX’s relative strength index has climbed above 70, indicating that the ongoing uptrend is about to run out. Additionally, 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 cause the price of CFX to drop to $0.097-0.141 as the primary downside target. December also coincided with the token’s 50-week exponential moving average (50-week EMA; red wave) close to $0.108, down about 65% from current price levels. Conversely, a clear break above the $0.28-$0.41 range could push CFX higher towards its resistance in the May-September 2021 session at $0.84.
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