Convex Finance Price Slips Under $6.5 As Markets Await Inflation Data

The Convex Finance price appears to be losing its bullish momentum in tandem with the downward action across the board. CVX price turned down after losing the support provided by the 50-day Simple Moving Average (SMA) at $6.07 to trade at $6 at the time of writing. Support at $5.6 may cushion the buyers against an extended downswing in the near term. But if breached, CVX could quickly plummet to $4.

CVX Investors To Remain Hopeful If Inflation Data Maintains Disinflation Optimism

The crypto market is hoping for positive news from the much-awaited policy decisions and inflation figures that could finally pull the sector from the snare of the 2022 winter. The U.S. Bureau of Labor Statistics is expected to release January’s Consumer Price Index (CPI) data on Tuesday, February 14. 

Market participants are eagerly waiting with optimism, particularly after Federal Reserve Chair Jerome Powell acknowledged the presence of “disinflation” in the U.S. economy.

👏📈# Crypto prices continue their cautious move upwards after Federal Reserve Chair Jerome Powell’s comments on disinflation yesterday. pic.twitter.com/Cc02NDmQjw

— Chloe Angel 🎄 (@Aidengo2021) February 8, 2023

Meanwhile, Economists are predicting CPI to rise 0.5% month-over-month in January, which would be a significant rise from figures seen in the past few months. Although the monthly CPI figure probably increased in January, the annual headline number is expected to reduce from 6.5% to 6.2%.

Convex Finance Price Needs To Hold Above This Level To Avoid A Sell-off

CVX price has been enjoying support from the $5.6 level, which has defended the token since January 28. An attempt to pull the Convex Finance price below this buyer congestion zone has failed on several occasions. 

As such, a four-hour candlestick close below this critical level would trigger massive sell orders that could extend the ongoing correction. The first line of defense would emerge from the 200-day SMA at $5.5. 

Additional footholds may be found at the $4.7 major support level and the $4.5 psychological level, before tagging the pessimistic target of the governing chart pattern at $4.09. This would bring the total losses to 27% from the breakout point and 31% from the current price. 

CVX/USD Four-hour Chart

A sell signal from the moving averages validated the rejection from the triangle’s descending trendline. The sell signal came in the form of a bearish cross that took place on February 12 when the 50-day SMA crossed below the 100-day SMA, signaling the start of a downtrend. 

The Relative Strength Index (RSI) was also moving downward toward the middle line. This was an indication that the sellers were regaining control of the market.

However, a 2% bullish move in CVX price in the last 24 hours, signals the return of a call to buy. Market participants should pay attention to how the oscillating trend-following momentum strength indicator responds to changing volatility trends in the market. A buy signal would materialize as the RSI turns back up toward the overbought region.

On the upside, gains may be realized if support at the 200-day SMA and buyer congestion at the horizontal line of the descending triangle at $5.6 is strengthened by investors buying at lower levels. In that case, we cannot rule out the possibility of an extended recovery to $7.15.

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