Conflux has finally managed to break out of its prolonged downtrend, a development that has sent a wave of optimism through the market. However, before we get carried away, it's important to consider the potential roadblocks ahead.
Key Considerations:
* Retest Risk: Given the recent breakout, a retest of the previous support zone around $0.130-$0.138 is a likely scenario. A successful defense of this level would bolster the bullish case.
* Momentum Gathering: For a sustainable rally, Conflux must clear the minor resistance at $0.226. A breach of this level, coupled with increasing volume and support from the 20-day EMA, would signal a stronger bullish trend.
* Pullback Potential: If momentum falters, a pullback to the breakout zone or the major support is possible. A failure to hold the $0.130-$0.138 support could lead to a drop towards the lower demand zone at $0.113.
* Bearish Scenario: A break below $0.113 would indicate a shift in control to the bears, potentially leading to a deeper correction and dashed hopes for a near-term recovery.
Conclusion:
While Conflux's breakout is a positive development, traders should approach the market with caution. The potential for a retest and the possibility of a pullback should be factored into any trading decisions. Vigilance and a strategic approach are essential to navigate the current market conditions.
