- Buying pressure, indicated by the spot volume on exchanges, pushed the price to $4.50.
- Signals from the RSI and Funding Rate suggested that CVX could drop below $4 as it was overbought.
Convex Finance [CVX], the native token of the yield optimizer for different protocols, stunned the market with a 90.85% rally in the last 24 hours. On the 16th of June, the CVX crypto traded around $2.14.
But in the early hours of the 17th, the value reached $4.50. Later on, it took a step back to 4.17 which was its price at press time. For those unfamiliar, Convex started as a yield optimizer on Curve Finance [CRV] before it extended to other protocols.
This time, it seemed Curve was one of the reasons CVX pumped. A few days ago, Michael Egorov, the founder of Curve Finance put the project and CRV holders at risk.
CVX volume beats previous milestone
This was because Egorov was liquidated to the tune of $27 million on his lending positions. As an aftereffect of the event, CRV plunged to an all-time low of $0.21.
However, the founder later disclosed that he had paid $10 million out of the debt. The overhang of the CRV collateral opened the way for CVX’s incredible increase.
Evidence also reflected in the inflows into veCRV, which Convex Finance was a part of. This increase in inflows implied that a lot of users locked their assets on Convex while expecting a good yield.
Source: X
Regarding the development, Jason Hitchcock, an analyst, explained that Convex might not be done. Explaining his thesis, Hitchcock noted that,
“Convex has captured curve,frax, f(x)n, Prisma, and others will come. They get a big piece of all their fees and established significant incentive markets for them. Stablecoins and pegged assets have found a home on Curve and those markets are taking off as expected.”
Meanwhile, the CVX crypto price was not the only notable surge. According to Santiment, the volume of the token jumped by an amazing 2677% in the last 24 hours.
As of this writing, the total 24 -hour trading volume was $161.61 million. Furthemore, AMBCrypto found evidence of increased interest in CVX crypto.
For example, the CVX/USD spot volume on Binance almost hit $32 million, indicating a new single-day high for the token. However, traders in the derivatives market were not left out.
Source: Santiment
Like the spot volume, derivatives falls in line
According to data from Coinglass, Open Interest (OI) jumped by 759.50%. An increase in OI implies that new money is coming into the market. However, when the OI decreases, it means that traders are closing their positions in the market.
At press time, the CVX crypto OI was $6.28 million. If the value continues to increase, it could serve as strength for the price.
Should this happen, the CVX native token could attempt to hit $5 in the short-term.
Source: Coinglass
However, it is important to evaluate other indicators. To assess CVX’s next direction, AMBCrypto analyzed the Funding Rate.
CVX price prediction: Is a decline coming?
Funding Rate gauges if the sentiment in the market is bullish or bearish. In doing this, the metric tracks the fee longs and shorts pay.
If funding is positive, it means that longs are paying shorts an amount to keep their positions open. In this case, the broader trader sentiment is bullish.
Conversely, a negative funding implies that shorts are paying a fee, and sentiment is bullish. At press time, the Funding Rate of the CVX crypto was positive, indicating that the perp price was at a discount to the spot price.
However, it seemed that price has begun to move lower. When this happens alongside positive funding, it means that perp buyers are in disbelief. It also implies that traders in the spot market are beginning to book profits aggressively.
Should this continue, CVX price might slide from the highs. Additionally, AMBCrypto examined the Relative Strength Index (RSI) on the 4-hour chart. The RSI measures momentum.
Source: Santiment
When the reading is below 30, it means that a cryptocurrency is oversold. On the flipside, a reading above 70 indicates overbought positions. At press time, the indicator was 87.96, suggesting that CVX was overbought.
Is your portfolio green? Check the Convex Finance Profit Calculator
Considering the condition of the both indicators above, the token might struggle to continue its hike. By the look of things, if selling pressure intensifies, the value of CVX might drop as low as $3.70 over the next few days.
Also, the prediction could be invalidated if market participants continue to place buy orders.
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