VeChain (VET) has seen a recent surge, but analysts remain cautious. Despite a 37% price jump, the altcoin struggles to climb above $0.032, raising concerns about a potential downward spiral.
A technical indicator known as a “potential evening star,” and a “falling channel formation” suggests a possible breakdown below the current $0.030 level. This breakdown could send VET prices as low as $0.027.
Vechain’s Struggle After a Rally
The daily chart paints a clear downtrend. Since its 2024 peak of $0.051, VET has plummeted to test support at $0.02254, marking a 54% market cap decline in just four months.
However, a recent market rebound coupled with excitement surrounding the VeBetterDAO launch triggered a bullish reversal for VeChain. This surge from the support level saw a 42% increase, challenging a key resistance trendline.
Despite reclaiming the $0.030 mark, VET faces resistance to surpassing this level. Currently trading at $0.029, the altcoin experiences a slight decline (1.92%) intraday. Nevertheless, there are signs of underlying demand, with lower price rejections reflected in smaller candlestick tails.
The bearish crossover warning from the MACD and signal lines adds pressure, especially as VET tests the 23.60% Fibonacci retracement level of $0.029.
Falling Channel Hints at a $0.030 Drop
The 4-hour chart reveals VET trading within a falling channel pattern, currently testing the 100 EMA (Exponential Moving Average) near the support trendline. While a potential double-bottom reversal pattern emerges, underlying demand hints at a potential strong bull run.
The RSI (Relative Strength Index) line showcases a gradual sideways movement as the price decline finds support. Interestingly, a bullish divergence in the 4H RSI hints at a potential price spike for VeChain.
Can VeChain Surpass $0.050?
A strong uptrend is a possibility if the 4-hour bull cycle gains momentum and breaks the falling channel. This breakout could trigger a domino effect, leading to a surge past the secondary resistance trendline identified in the daily chart.
Based on Fibonacci retracement levels, a successful breakout could see VET reclaim the 50% Fib level at $0.036. However, a breakdown below $0.030 could send prices tumbling to $0.025.
The crucial factor for reaching $0.050 lies in breaking the critical trendline. If successful, the bull run could not only push VET to $0.050 but potentially reach the 1.618 Fib level of $0.069.
Conclusion
VeChain finds itself at a crossroads. While recent bullish signs are encouraging, technical indicators warn of a potential breakdown. The ability to surpass the resistance level and break the falling channel pattern will be crucial in determining the altcoin’s future trajectory.
