As the crypto market grapples with uncertainty, VeChain (VET) finds itself at a crucial juncture. The altcoin, boasting a market cap of $1.672 billion, has been navigating a bearish trend, marked by a contracting falling wedge pattern on its daily chart. Despite the current downturn and a recent death cross, there are signs that a potential recovery could be on the horizon. Could this falling wedge be the catalyst for a breakout rally?
VeChain’s Falling Wedge – What To Watch
VeChain’s daily chart is illustrating a classic falling wedge pattern, with the price currently hovering around $0.20 after a recent 3.78% drop. This pattern, characterized by converging trendlines, often precedes a significant price move. As VeChain approaches the apex of this wedge, traders are keenly watching for a potential high-momentum breakout.
The price action over the past week has been marked by indecisiveness, with a minor 0.86% decline following a more severe 16.71% drop the previous week. This drop was accompanied by a bearish engulfing candle, highlighting the prevailing negative sentiment. As VeChain tests the psychological support level at $0.20, the broader market’s volatility adds to the uncertainty.
Network Health and Growth – A Silver Lining?
Amidst the price volatility, there’s a positive development on the network front. According to VechainStats, the number of accounts on the VeChain network has surged from 2.16 million to 4.183 million over the past year—an impressive 100% increase. Active accounts also saw a notable spike to 160,264 on September 3. This growth indicates robust network health, which could underpin future price movements.
Key Levels and Indicators
VeChain’s current price action is crucial as it tests support levels. The psychological support at $0.20 is being challenged for the third time in two months. The daily Relative Strength Index (RSI) is showing bullish divergence, suggesting potential upward momentum despite the recent bearish crossover of the 50-day and 200-day EMAs.
If VeChain manages to hold above the $0.20 support, the next potential resistance level is near the 50-day EMA at $0.24. Should the price surpass this, the 200-day EMA at $0.28 could be the next target. Conversely, a break below the current support could see the price testing lower levels at $0.01922 and $0.0175650.
VeChain’s falling wedge pattern and network growth present a mixed but intriguing picture. While the bearish trend and technical indicators suggest caution, the network’s expanding user base and bullish divergence on the RSI could signal a forthcoming recovery. As always, investors should stay vigilant and watch for key price movements and market signals that could indicate the next big shift for VeChain.
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.
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