The article provides a technical analysis update on VeChain (VET), highlighting its struggles to break through multi-month resistance levels on the daily and weekly charts, while examining key support and potential breakout scenarios.
VeChain (VET) has been steady in performance amidst a sea of altcoin pumps. Let us take a closer look at the current technical analysis of VET, focusing on its daily and weekly charts to understand its recent price movements and potential future trends.
This article is an update from the previous technical analysis of VeChain.
Daily Chart
Diving into VeChain’s daily chart, we can observe a significant resistance block that the token lost back in May 2023. Since then, the price has attempted to retest this level multiple times, but each attempt has resulted in a failure to break above it. Additionally, the block was once a crucial support level during January, March, and May 2023, but it has now turned into resistance.
Despite the formation of a bullish cross on the daily chart, please do not interpret this as a definitive sign of an uptrend. The inability to overcome this major resistance level casts a shadow of uncertainty over VET’s short-term prospects.
In the event of a capitulation or a significant drop, the token could experience a pullback down to around $0.01470, potentially leading to the formation of a double-bottom pattern.
Daily RSI
Taking a look at the daily RSI, we can observe a consistent pattern of bouncing off the support block, with the most recent bounce occurring in July, indicating a move to the upside before encountering resistance. While the current trend line appears to have minimal impact, there is a possibility of a bounce off it in the near future.
In the event that the price drops below the support block, it is likely to lead to a move back down to the index of 32.5. Historical data shows that every time the price has dropped below the support block, it has ultimately reached the oversold region.
This level has been lost and regained multiple times in the past, with occurrences in February, April, and June 2023. The repeated retests and bounces at this level since 2021 highlight its importance as a key support marker.
Weekly Chart
Switching over to the weekly chart, a clear falling wedge pattern is evident. A potential breakout from this pattern would lead us to target a key resistance level at $0.086. This level has served as a significant barrier in the past, causing strong rejection, and it was the catalyst for the creation of the falling wedge formation. Thus, a breakout would be a promising development, and reaching the target may be achievable by 2024, though the exact timing remains uncertain.
However, there is a crucial resistance trend line that is currently limiting upward movement. Breaking above this trend line is essential for the confirmation of any breakouts. Volume plays a critical role in this scenario, as we want to see substantial volume accompanying the breakouts to ensure their validity. A breakout without sufficient volume could turn out to be a false signal, leading to a return to the pattern, potentially as a fakeout.
To assess the possibility of a bear market bottom, we need to consider specific levels. As long as we remain below the April 2022 low, it is premature to declare that the bear market bottom has been established. The market could still form a lower low, indicating a continuation of the downtrend.
For a more optimistic outlook, we need to see breakouts above major resistance levels, as these developments would allow us to set meaningful upside targets. Conversely, continued loss of support levels will hinder upward movement unless a significant shift occurs.
Final Thoughts
VeChain’s (VET) price movement is currently hindered by persistent multi-month resistance, presenting a significant challenge for the altcoin’s upward momentum. The failure to breach this crucial barrier has raised doubts about the immediate bullish prospects for the token.
Until VeChain manages to overcome key resistance levels and solidify its position above critical support zones, its long-term trajectory remains uncertain. As the cryptocurrency market is highly dynamic, always stay updated on any new developments and news that may influence VET’s price action in the future.