VeChain Technicals Spell Trouble for the Bulls
VeChain (VET) is trading at extreme overbought conditions, indicating that a correction is near.
- VeChain is down over 10% from its recent high of nearly $0.10.
- The price action seen since the beginning of the year suggests that VET is poised to retrace to $0.06 before it bounces back.
- A technical indicator further validates the pessimistic scenario.
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A crucial resistance level has rejected VeChain’s uptrend. Now, VET seems primed for further losses as several sell signals pop up.
VeChain Flashes Multiple Sell Signals
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 twentieth-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 green nine 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.
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.
Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.