"Woke up to a text at 2 AM that CFX dropped from $0.18 to $0.17, and my 5x long position was directly liquidated, losing $12,000!" "I just added more at $0.175, but it dropped to $0.172 again. Is it going to zero?"
Yesterday's late-night 'sudden plunge' of CFX completely shocked the fan group - one fan was even worse off; to buy the dip on CFX, they put in the $20,000 they had prepared to buy ETH and are now stuck at $0.173, telling me 'I’ve been staring at the K-line until dawn, and the more I look, the more anxious I get.'
Don't rush to blame the 'main force for dumping'; this plunge seems sudden, but it actually hides a dual signal of 'technical adjustments' and 'fundamental impacts'. Today, let’s thoroughly analyze the logic of 'KDJ overselling + whale dumping', and discuss whether $0.165 is truly a 'golden pit' or a 'trap for enticing buyers', helping you avoid the next wave of liquidation.
1. First, look at the details of the plunge: it wasn't a sudden bad news hit but a chain reaction triggered by whale 'concentrated selling pressure'.
Yesterday's late-night plunge led many to believe it was due to 'regulatory bad news', but I couldn't find any solid evidence online - neither the project party ran away, nor were there any new moves from the SEC. The real 'culprit' lies in the on-chain data:
Whale address abnormal selling: lookonchain data shows that a large holder with 230 million CFX (approximately 40 million USD) sold off in three installments around $0.18, each over 50 million coins, directly smashing the buy orders.
A surge in selling orders on exchanges: For the CFX/USDT trading pair on Binance, selling orders increased from 50 million USD to 120 million USD within one hour. Small retail investors saw the whale dumping and panicked and sold, leading to a 'stampede-like drop'.
Technical breakdown worsens the situation: CFX had been oscillating in the $0.172-0.18 range for 3 days, with $0.172 being a 'support level that hasn’t been broken after three tests'. Once it was breached late at night, programmatic sell orders and leverage stop-loss orders were all triggered, dropping below $0.17 in just one hour, touching a low of $0.168.
The most heartbreaking is the liquidation data: over 210,000 investors were liquidated in 24 hours, with CFX alone accounting for $180 million in liquidation amounts. One fan opened a 10x long position at $0.178 without setting a stop loss, and when it dropped to $0.17, they were forcibly liquidated, left with only 300 USD.
2. Don't be fooled by 'overselling'! $0.165 is the golden pit, but it needs to meet these 2 conditions.
Now many people are focused on 'KDJ overselling' shouting 'buy the dip', but I need to cool them down: Not all overselling is a 'golden pit'. For $0.165 to be a bottom, it must meet these 2 conditions:
Whale selling pressure has been released: From on-chain observations, that large holder with 230 million coins has already sold 180 million, and the remaining 50 million coins haven’t moved. Additionally, there is a 'buy order of 120 million USD' in the $0.168-$0.17 range (normally only 30 million USD), indicating that there is capital ready to purchase.
Hong Kong compliance benefits need to be realized: Yesterday, Hong Kong's (stablecoin regulation) officially took effect. As the 'only compliant public chain in China', CFX has previously collaborated with Hong Kong's Cyberport. If it can obtain a compliance license, institutional funds will gradually enter the market - referencing the 20% rise of ETH after receiving EU 'technological asset' recognition. If CFX has compliance backing, the bottom at $0.165 will be secure.
But beware of the 'trap for enticing buyers': If $0.165 drops and the 1-hour trading volume is still below 50 million USD (no buy orders), or if the MACD histogram is still getting longer (the bears aren't retreating), don’t rush to buy the dip - in 2023, CFX also experienced 'KDJ overselling + crashes', where many bought in at $0.2, only to see it drop to $0.12 and be stuck for half a year.
3. The 'double-edged sword' of news: Hong Kong's favorable compliance can save CFX, but these 2 risks are more deadly.
Many only see the 'Hong Kong compliance benefits' but overlook the hidden concerns behind it:
U.S. stock market drag: On August 25, the Nasdaq fell by 0.9%, and tech stocks were generally weak. CFX has a strong correlation with U.S. tech stocks (correlation coefficient of 0.7). If U.S. stocks continue to fall, even with compliance benefits, CFX will still find it hard to stand alone.
The 'hidden bomb' from the U.S. SEC: Although CFX is compliant in Hong Kong, the U.S. SEC has not clearly defined its 'asset category' - if it is later classified as 'securities', it will face delisting risks. XRP fell by 60% in 2022 due to this issue, so this risk must be taken seriously.
The ecosystem hasn't kept up: CFX's compliance advantages are obvious, but it lacks 'hit DApps' - currently, the DeFi locked value is only $500 million, far from ETH's $80 billion. If it can't quickly launch appealing applications to attract users, even if it rises to the $0.24 resistance level, it will be hard to maintain.
A friend from an institution told me: 'We are currently focusing on CFX, but we haven’t dared to increase our holdings yet. We are waiting for its ecological data and the SEC's stance. Compliance is just a stepping stone; real demand is needed for stable growth.'
4. Special exclusive trading advice: Split into 'aggressive/conservative' camps, don’t rush in.
Aggressive strategy: $0.165 light position for trial, don’t hold on to the stop loss at $0.16.
If it drops to $0.165 and the 1-minute K-line closes with a 'hammer candlestick' (long lower shadow), you can enter a 20% position, initially aiming for $0.175 (the first resistance level).
Stop loss must be set at $0.16. If it falls below, it indicates that buy orders can't hold, and it is likely to drop to $0.155. Don’t hold on stubbornly - last time, a fan bought in at $0.17 without a stop loss, and when it dropped to $0.15, they had to cut losses, losing 30%.
Conservative strategy: Wait for 2 signals before entering, which is steadier than trying to buy the dip.
Wait for MACD golden cross: Daily MACD turns positive from negative, and the histogram gets longer (indicating bulls are starting to exert force);
Wait for it to stabilize at $0.175: $0.175 is the previous oscillation platform. After it stabilizes and confirms with a pullback, enter a 30% position, aiming for $0.19-$0.2.
Everyone pay attention: Don't open high-leverage contracts.
Currently, CFX is highly volatile; with 5x leverage, a mere 3% drop can lead to liquidation. Among the 210,000 people liquidated yesterday, 90% were contract players.
Spot trading can be tried with small positions, but contracts must be stopped. Protecting capital is more important than 'betting on a rebound'.
5. Finally, let’s be real: CFX’s 'golden pit' needs to wait for 'emotional calm'.
The late-night plunge yesterday was more of a short-term impact from 'whale selling pressure + retail panic', not a trend reversal - after all, the favorable compliance in Hong Kong is still in place, and CFX's technical advantages haven't disappeared. But the market sentiment is unstable right now, so don’t think about 'buying at the lowest point'.
This morning, an old fan told me: 'Fortunately, you advised me to close all contracts earlier; otherwise, I would have been liquidated this time too.' It's not that I'm skilled, but I've suffered too many losses from 'buying the dip in crashes' and know that 'when sentiment is unstable, there can be deeper lows beneath.'
Next, I will keep a close eye on CFX's on-chain data (whether whales continue to sell, if buy orders are sufficient) and the compliance progress in Hong Kong. Once there’s a 'buying signal', I will announce it in the fan group immediately. If you want to avoid liquidation and seize the golden pit, just follow me - making money in the crypto world relies on 'contrarian thinking' and 'risk control'. Understanding risks is key to earning money.
Let’s discuss in the comments: Did you buy the dip on CFX yesterday? How much are you down now? Speak up, and I’ll help you analyze whether to cut losses!
Just follow me - in the crypto world, following the right people and seeing the right direction is more important than anything else.
