- 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.
As an experienced analyst, I have closely monitored the recent price surge of Convex Finance (CVX) and its related events. The buying pressure, indicated by the spot volume on exchanges, pushed the price to a remarkable $4.50 in just 24 hours. However, signals from the RSI and Funding Rate suggested that CVX could drop below $4 as it was overbought.
The yield optimizer token, Convex Finance (CVX), surprised the cryptocurrency world with a remarkable 90.85% price surge over the past 24 hours. Prior to this growth spurt, on June 16th, CVX was priced at approximately $2.14 in the market.
In the early hours of the 17th, I watched in awe as the value of my Convex investment hit an all-time high of $4.50. However, by the press time, it had retreated slightly to $4.17. For those new to the crypto scene, let me fill you in: Convex initially emerged as a yield optimizer on Curve Finance (CRV). Since then, it has expanded its reach to include other protocols as well.
In this occasion, Curve Finance appeared to be a significant factor in boosting CVX. A few days prior, Michael Egorov, the founder of Curve Finance, introduced potential danger to the project and its CRV token holders.
CVX volume beats previous milestone
Due to Egorov’s $27 million loss on his lending positions, CRV experienced a significant downturn and reached a record low of $0.21.
Despite this, the founder later revealed that he had personally covered $10 million worth of debt. The substantial CRV collateral paved the way for CVX‘s remarkable growth.
The flow of funds into veCRV, where Convex Finance is involved, showed a significant uptick, indicating that many users secured their assets with Convex in anticipation of attractive returns.
As an analyst, I’ve been closely following Convex’s development, and I want to share my perspective on its potential progress. Based on my analysis, it seems that Convex may still have some way to go before reaching completion.
As a researcher studying the decentralized finance (DeFi) landscape, I’ve noticed an intriguing trend: Convex Finance has successfully onboarded projects like curve, frax, f(x), and n, in addition to Prisma and others. These protocols have secured substantial revenue shares through this association, creating robust incentive structures for their continued growth. Stablecoins and pegged assets have discovered a thriving ecosystem within Curve, with these markets expanding as anticipated.
During this period, the price of CVX cryptocurrency wasn’t the sole significant increase. Intriguingly, as reported by Santiment, the token’s volume experienced a staggering rise of over 2600% within the past 24 hours.
From my perspective as an analyst, at the moment, the daily trading volume for the cryptocurrency market has reached a total of $161.61 million. Additionally, based on my research using AMBCrypto, there are signs suggesting heightened investor attention towards CVX crypto.
On Binance, the CVX/USD spot market volume came close to reaching $32 million, marking a new record for the token in a single day. Meanwhile, activity in the derivatives market didn’t go unnoticed, as well.
Like the spot volume, derivatives falls in line
Based on Coinglass’ figures, Open Interest surged by an astounding 759.50%. This significant rise indicates a substantial influx of fresh capital into the market. Conversely, when Open Interest drops, it signifies that traders are liquidating their positions.
Currently, the Open Interest for CVX crypto stands at approximately $6.28 million. Should its value continue to rise, this indicator may bolster the asset’s price.
Should this happen, the CVX native token could attempt to hit $5 in the short-term.
As a researcher examining CVX‘s potential future trajectory, I believe it’s crucial not to overlook other relevant indicators besides the one currently under consideration. In my analysis for AMBCrypto, I assessed the Funding Rate as one of these important indicators.
CVX price prediction: Is a decline coming?
The Funding Rate indicates the market’s overall attitude by monitoring the fees paid by long and short positions.
As a crypto investor, I would interpret positive funding as long investors paying short investors to hold onto their bearish bets. This scenario indicates a bullish outlook among broader traders in the market.
In contrast, when funding is negative, it signifies that short positions are incurring a cost, and market sentiment is generally optimistic. At the current moment, the Funding Rate for CVX cryptocurrency is positive, suggesting that the perpetual contract price is lower than the spot price.
As price started to decline, an intriguing scenario emerged: while this downturn coincided with favorable funding conditions, it suggested that perp buyers were taken aback. This observation also indicated that traders in the spot market might be actively taking profits.
If the current trend persists, it’s possible that CVX‘s price may dip from its peak. Furthermore, AMBCrypto analyzed the Relative Strength Index (RSI), which is used to evaluate momentum, on the 4-hour chart.
As an analyst, I would interpret a reading below 30 for a cryptocurrency as a sign of oversold conditions, meaning it may be undervalued and due for a rebound. Conversely, a reading above 70 implies overbought conditions, suggesting the cryptocurrency may be experiencing excessive buying pressure and could potentially experience a correction. At the present moment, with an indicator reading of 87.96, I would assess that CVX is exhibiting signs of being overbought.
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Based on the current state of the indicators mentioned, it seems that the token could have difficulty continuing its upward trend. If selling forces become more pronounced, the price of CVX may fall to around $3.70 in the coming days.
Also, the prediction could be invalidated if market participants continue to place buy orders.
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2024-06-17 14:16