Convex Finance [CVX] saw a 28.5% rally in the past 24 hours and a 12-fold increase in daily trading volume. The DeFi protocol Convex Finance allows Curve liquidity providers to boost rewards and acts as a yield optimizer.
Why was CVX gaining popularity this weekend? There’s a theory that the token rallied 59% on Saturday because it shares the same ticker as Chevron, the global energy corporation.
The Convex Finance token has been consolidating between the $1.60 and $1.93 price range since the second half of November. The compression and the recent breakout might have nothing to do with Chevron.
Tax-loss harvesting at the end of the year was not putting sell pressure on crypto, and liquidity was returning after the end of the festive season.
Bitcoin [BTC] was inching toward the $94.5k resistance level, bolstering altcoin market sentiment.
The 1-day chart has a strongly bullish technical bias. A long-term downtrend followed by the nearly two-month consolidation under $2 has finally broken out, on high trading volume as well.
The OBV captured the extent of the volume surge, and the DMI indicated a bullish trend shift on the daily timeframe.
The $2.32 and $2.90 levels were the next key levels for the bulls to capture.
In this scenario, CVX holders should be rushing to secure profits and exit. However, this outcome might be less likely, given the high trading volume and the surge in speculative interest in the derivatives market.
Increased volatility to hunt out over-leveraged positions is likely, but this need not result in a full retracement of Saturday’s rally.
There was an imbalance at $1.90 on the 1-hour timeframe. Combined with the Fibonacci retracement levels, it showed that traders can wait for a pullback just below $2 to buy.
The bullish target would be the 23.6% Fib extension level at $2.92. This level has confluence with the $2.90 higher timeframe resistance. A drop below $1.87 would invalidate this bullish idea.
