Convex Finance (CVX) Price Creates False Breakdown, Will A Recovery Follow?
The price of Convex Finance (CVX) is in the process of reclaiming a crucial support level. If successful, a strong uptrend may follow.
Weekly Outlook
The price of Convex Finance (CVX) has been declining within a descending wedge pattern since June 2022. The price has repeatedly validated both the support and resistance of the wedge, confirming the pattern’s validity.
Technically, the descending wedge is considered a bullish pattern, which means a breakout is anticipated.
This outlook is further reinforced as CVX is currently in the process of creating a false breakdown below the wedge pattern (blue ellipse). A false breakdown is seen as a bear trap and often leads to a strong uptrend afterward.
The weekly RSI (Relative Strength Index) has surged from oversold zone and is breaking above the descending resistance line, showing that the bulls are trying to make a comeback.
Therefore, if the false breakdown is confirmed, the price of CVX could rise to a significant resistance zone at $4.2, formed by horizontal resistance and the wedge’s resistance line. This level represents a 50% increase from the current price.
Short-Term Resistance
The daily chart shows that CVX has broken above a descending resistance line that formed since April 2023. The breakout occurred with a strong bullish candle, further validating the breakout’s legitimacy.
Therefore, the CVX price has likely begun a recovery, at least in the short term.
The nearest horizontal resistance level is found at $3.3.
Conclusion
Technical indicators suggest that the CVX price is likely to continue rising in the near future. The nearest target is identified at $3.3, with a potential further increase to $4.2.
This outlook could be invalidated if the false breakdown on the weekly timeframe is not confirmed in the coming one or two weeks.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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