Conflux hardfork triggers 10% CFX drop – Here’s what went wrong!

Key Takeaways

CFX faces conflicting signals post-hardfork: Open Interest dropped 19%, MACD flipped bearish, and SAR turned down. But five straight days of accumulation suggest the rally may not be over just yet.

Conflux [CFX] recently initiated a major step toward enhancing its network with the v3.0.0 hardfork upgrade, which comes with a deadline projected for the 1st of September.

The hardfork includes eight separate Conflux Improvement Proposals (CIPs), grouped into three categories: EVM compatibility improvements, to enhance integration with the Ethereum ecosystem, bug fixes, and rule adjustments for its Proof-of-Stake (PoS) consensus algorithm.

While community sentiment leaned bullish—hitting 77.78%—the price dropped over 10% in 24 hours, at press time, exposing a growing split between retail optimism and market action.

Liquidity drains from CFX

Derivatives traders, however, appear less optimistic. Many are betting against a positive outcome from the proposed changes.

Roughly $11.79 million has exited the derivatives market—a 19% decline—leaving current open contracts valued at $58.8 million according to Coinalyze.

Overleveraged long positions on Binance bore the brunt of the losses, with $1.7 million liquidated. This shift reflects growing bearish sentiment in the market.

This scale of liquidity outflow has aligned with technical indicators signaling further downside risks.

MACD flips bearish as SAR confirms the drop

The Moving Average Convergence Divergence (MACD) has formed a ‘death cross’—a pattern that typically precedes sharp price drops.

This occurred when the blue MACD line (0.00282) crossed below the orange signal line (0.00284).

The bearish pressure doesn’t end there. A shift in the Parabolic SAR (Stop and Reverse) indicator has emerged, showing a dotted line above the current price level.

While only one dot has formed so far, a continuation could confirm intensifying selling pressure and suggest that CFX may fall further.

Can accumulation counter the drop?

Not all investors are bearish. Spot market participants appear to view the dip as a buying opportunity.

According to CoinGlass, accumulation has been ongoing for five consecutive days, with $14.23 million worth of CFX moved into private wallets.

In the last 24 hours alone, $1.76 million was withdrawn from exchanges.

Typically, large transfers from exchanges to private wallets signal a long-term bullish outlook, as holders expect future gains.

From a broader market view, that optimism may be warranted. CFX has posted a strong recent performance, gaining 146% over the past four weeks.

If accumulation continues, the recent pullback may prove to be a short-lived correction, setting the stage for another upward move.