VeChain Technicals Spell Trouble For The Bulls
Crypto Briefing | Mar 31, 2021 01:14AM ET
VeChain (VET) is trading at extreme overbought conditions, indicating that a correction is near. A crucial resistance level has rejected VeChain’s uptrend. Now, VET seems primed for further losses as several sell signals pop up. VeChain posted massive gains throughout March, rising by nearly 150%. The coin to a new high of nearly $0.10 on Mar. 22.
A wave of profit-taking hit VET after the peak, pushing its market value down by more than 23%. Although prices have partially recovered, the 20th-largest cryptocurrency by market capitalization could be bound for further losses.
VET has been contained within an ascending parallel channel since December 2020. Each time VET has risen to the channel’s upper boundary since then, a rejection occurs that pushes prices to the lower edge. From this point, it tends to rebound.
If this price action repeats, the recent rejection from the resistance trendline might be significant enough to push VeChain towards the channel’s lower boundary at $0.06 before it bounces back.
The Tom DeMark (TD) Sequential indicator adds credence to the pessimistic outlook. This technical index presented sell signals in the form of nine green candlesticks on both the weekly and 3-day charts.
The bearish formations forecast that VeChain will retrace for one to four candlesticks before the uptrend resumes.
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Despite the grim worst-case scenario, the cryptocurrency market’s unpredictability means a bullish market outlook is not out of the question. Bull investors push VeChain above the recent high of nearly $0.10 to avoid incurring further losses.
Such an upswing would likely generate FOMO among market participants as VET will be entering into price discovery mode. Under such unique circumstances, this cryptocurrency could advance towards $0.11 or even $0.12.
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