The Convex Finance (CVX) price is currently flipping the previous important resistance level into support. If successful, it could increase more than 50% in April. CVX is the native token of Convex Finance, a project created to optimize user profits on the decentralized exchange Curve.
Weekly outlook
The Convex Finance (CVX) price has fallen below the 20-week moving average (MA) since May 2022. During this time, the price reached a yearly low of $3 in June of the same year and began to recover.
The recovery turned out to be a dead cat bounce when the CVX price was rejected by the 20-week MA and dropped back down to the support level of $3 once again in January 2023. When combining this level with the low created in May 2022, we see the formation of a double bottom pattern, combined with bullish divergence in the weekly RSI indicator. This is a bullish pattern that often appears at the end of a downtrend.
Indeed, the CVX price has risen sharply since then and broken above the 20-week MA with a large bullish candle. After the initial rejection, it is currently flipping this MA into support (blue arrow). If successful, it could rise to the long-term resistance level of $8.3, marking an increase of over 50% from the current level.
Because the 20-week MA coincides with the 0.5-0.618 Fib retracement support area, it is likely that the price will bounce from this level.
Descending parallel channel
After a strong increase at the beginning of the year, the CVX price corrected inside a descending parallel channel. This is a bullish pattern that often leads to a breakout in most cases.
During the correction, the CVX price bounced from the support level of $4.9 and formed a triple bottom pattern. This is a bullish pattern that often leads to the continuation of the uptrend.
Combining the formation of bullish patterns, it is likely that the price will break above the channel and rise to the recent high of $7.26.
The action also confirms the bounce from the 20-week MA, as mentioned above.
Conclusion
The most likely prospect is that the CVX price will break out of the current descending parallel channel and rise at least to $7.26.
This view will be invalidated if the price breaks down below the support level of $4.9.
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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