Key Takeaways
Conflux saw heightened volatility toward the end of July, with a false breakout from the triangle pattern. As the price approaches the pattern’s apex, the chance of a breakout increases.
Conflux [CFX] was trending higher and had made extraordinary gains in July. The L1 blockchain native token recorded a 297% move from the $0.07 low to the $0.28 high of July.
The swing high could be a sore spot for bullish CFX traders, as the token saw an immediate retracement back toward $0.18 on the 29th of July.
The price action of the past ten days has resembled a consolidation more than a bullish trend. Hence, even though the market structure was in favor of the buyers, traders need to watch out for volatility.
AMBCrypto explained why, with the help of the symmetrical triangle pattern.
The CFX triangle pattern and what it means
Source: CFX/USDT on TradingView
Marked in white, the triangle pattern signified the reduction in volatility. Such scenarios are followed by swift price breakouts, and are accompanied by heightened trading volume.
Given the strong gains in July, it appeared likely that this consolidation will be followed by a bullish breakout.
However, there is a small chance that CFX will test the lower trendline, dip below it to fake a breakout before moving higher.
Source: CFX/USDT on TradingView
Traders need not worry too much about the drop to $0.18, which is where the lower trendline is around.
Right now, the overhead resistances at $0.218 and $0.23, marked in red, were the key resistances for Conflux to break. Once these levels are flipped to support, swing traders can look to enter long positions.
Source: CoinGlass
The 2-week liquidation heatmap showed that the $0.18 and $0.236 levels were the next key magnetic zones. They lined up very well with the symmetrical triangle pattern.
Due to how close this magnetic zone is to the price, a move to $0.24 and higher is likely in the coming days.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
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