Conflux [CFX] Surges 40% as Short Orders Liquidate

Conflux [CFX], a prominent blockchain platform, experienced a significant surge of 40% within a single day, driven by the liquidation of short orders. This abrupt price movement has sparked considerable interest and speculation within the cryptocurrency community. The dominance of buyers over sellers in the market suggests that Conflux may continue to trend higher in the near future. The liquidation of short orders, which typically occurs when the price of an asset rises sharply, often leads to a cascade of forced selling by traders who had bet on a price decline. This dynamic can create a self-reinforcing cycle, where the liquidation of short positions further propels the price upward, as seen in the case of Conflux.

The rapid price increase of Conflux can be attributed to several factors. Firstly, the liquidation of short orders creates a supply shock, as traders who had shorted the asset are forced to buy back their positions to cover their losses. This sudden influx of buying pressure can drive the price higher, as seen in the 40% surge experienced by Conflux. Secondly, the dominance of buyers over sellers indicates a shift in market sentiment, with more participants willing to take on long positions in the asset. This bullish sentiment can further fuel the price increase, as more traders enter the market to capitalize on the upward trend.

Looking at the technical outlook of Conflux’s price chart showed the altcoin had broken above consolidation that had been in place for about four months. CFX broke above the $0.10 zone with great momentum, leading to the 40% positive change in its market value. However, the continued surge in price could expose CFX to a correction. The distinct level where a major hurdle may be met looks to be $0.18, per the price structure. If CFX was to do a retest, the $0.10 seemed to be the optimal zone where this could happen. Alternatively, continued momentum of the altcoin could topple the chances of a correction.

As the charge continued, more bullish signs reigned, especially in the derivative markets as opposed to spot. CFX’s volume rose 374% reaching $551.55 million. This was supported by Open Interest (OI) that was 109% higher than that of the previous day. Additionally, the overall Long/Short ratio across different top exchanges was above the 1 mark, suggesting traders were buying CFX. That of top traders was higher, meaning the savvy ones were also betting higher prices. For liquidations in the last 24 hours, CFX was seeing more shorts taken out as price pumped. As of press time, across the one-hour time frame, CFX was seeing in excess of $700K while the higher ones got almost $1 Million in liquidations.

Isolating trading on Binance Futures, the heatmap showed that traders were over-leveraging on longs as they reduced that of shorts. The 50X and 25X leverages increased after price broke above $0.10 and became more pronounced as price approached $0.15. On the other hand, CFX short orders were reducing with 50X only appearing at the $0.15 range. This precedence suggested that short traders were getting exhausted. That said, the cumulative short liquidation leverage was about $1M while that of longs was close to $8M. This meant a disparity of almost of 8X confirming buyers had outdone sellers.

The implications of this price movement for Conflux and the broader cryptocurrency market are significant. For Conflux, the surge in price could attract more investors and developers to the platform, potentially leading to increased adoption and usage. However, it is important to note that the cryptocurrency market is highly volatile, and price movements can be unpredictable. While the dominance of buyers over sellers suggests a bullish trend, it is possible that the price could correct in the coming days or weeks. For the broader cryptocurrency market, the price movement of Conflux serves as a reminder of the potential for rapid and significant price changes in the asset class. The liquidation of short orders and the dominance of buyers over sellers are dynamics that can be observed in other cryptocurrencies as well, and traders should be aware of these factors when making investment decisions. Additionally, the price movement of Conflux highlights the importance of risk management in the cryptocurrency market, as sudden price changes can lead to significant gains or losses for traders.