As VeChain (VET) trades at $0.1979, the cryptocurrency finds itself entangled in a bearish market trend, raising questions about its potential for recovery. This analysis delves into whether recent network growth could be the catalyst for a bounce back to the $0.24 mark.
VeChain’s recent price action has been marked by a falling wedge pattern on the daily chart, a formation that often signals a potential breakout. However, with VET having dropped 3.78% yesterday alone, and experiencing a 10.77% decline over the past week, the market sentiment remains cautious. This follows a sharp 16.71% drop the week before, accompanied by a bearish engulfing candle that further exacerbated investor concerns.
Network Growth Signals Potential
Amid the price struggles, VeChain’s network growth provides a glimmer of hope. According to VechainStats, the network’s total accounts have nearly doubled over the past year, climbing from 2.16 million to 4.18 million. Active accounts also saw a surge, reaching 160,264 as of September 3. This robust network expansion suggests that despite the current bearish trend, the underlying infrastructure of VeChain is gaining strength.
On the technical front, VeChain’s price action is supported by a trendline that has successfully held three times in the past two months. The daily Relative Strength Index (RSI) is exhibiting a bullish divergence, hinting at a possible reversal. Yet, the technical indicators offer a mixed outlook. The recent post-death cross between the 50-day and 200-day Exponential Moving Averages (EMAs) suggests a prevailing bearish trend. If the price dips below the current support trendline, the next levels to watch are $0.01922 and $0.0175650.
Conversely, a bullish scenario could unfold if VeChain manages to push above $0.20. Resistance is expected near the 50-day EMA at $0.24, with further upward momentum potentially targeting the 200-day EMA at $0.28.
Outlook and Strategy
VeChain’s current price struggle at $0.1979 mirrors broader market uncertainties. Yet, the significant growth in network accounts presents a potential positive outlook. While technical indicators call for caution, the robust network health could support a rebound if market conditions shift favorably.
Investors and analysts should closely monitor how network developments interplay with market trends to assess whether VeChain can break through the $0.24 resistance level. The potential for recovery remains, driven by the underlying strength of VeChain’s expanding network and the technical signals that could signal a forthcoming shift in market dynamics.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
