On July 5, VeChain price began to rise after breaking out of a bear flag pattern.
Since June 29, the anchored VWAP has been critical in controlling rebound attempts.
Within the following week, the VET 50-day simple moving average (SMA) will generate a bearish Death Cross pattern.
Following the June 22 low, VeChain price formed a bear flag pattern, taking the cryptocurrency to the resistance established by the 200-day SMA and the Anchored VWAP from January 3. VET broke out of the pattern on July 5th, despite the strong opposition, and is now registering a convincing follow-through today. VeChain is expected to test at least the May 23 or June 22 lows, and perhaps decline 60% from the pattern breakout, based on the present price structure.
Despite dropping 85 percent at the May 19 low, VeChain price rose 4% in the second quarter, presenting an intriguing tale in the cryptocurrency complex. Nonetheless, since the May 19 low, VET has been hampered by distribution, and it has recently refused to recognise the support provided by the 200-day SMA at $0.091 and the Anchored VWAP from January 3 at $0.088, instead seeing them as resistance.
VeChain pricing returned from a low of $0.059 on June 22 to a high of $0.059 on July 4, although it did so in a corrective structure supported by a volume profile that did not attain above-average volume levels on positive days. As a result, on July 5, VET broke out of a bear flag pattern with a 5% decline, which was confirmed today with a 7% drop at the time of writing.
With a measured move of 60%, the bear flag pattern establishes $0.035 as the VET price target. The May 23 low of $0.065, the June 22 low of $0.059, the May 19 crash low of $0.042, and ultimately the 78.6 percent Fibonacci retracement level of the 2021 advance at $0.039.
A test of the June 22 low of $0.059, implying a loss of almost 20% from the current price, is a more plausible conclusion for the VET bear flag resolution. VeChain pricing may be tempted to test the May 19 low of $0.042 if selling accelerates beyond that level, but it would only happen if the cryptocurrency complex experiences a big wave of selling pressure.
A bullish momentum divergence on the daily Relative Strength Index (RSI) is something to look for if VeChain price falls below the June 22 low. It would admit to selling pressure weariness.
Chart of the VET/USD pair on a daily basis
VeChain pricing needs a daily close above the Anchored VWAP at $0.088 and the 200-day SMA at $0.091 to defy the negative narrative. However, the dropping 50-day SMA at $0.101, which is on track to cross below the 200-day SMA in less than a week, triggering a bearish Death Cross pattern, would rapidly face VET.
After today’s 7% drop, VeChain’s price movement is obviously to the south. Bears have taken control of the digital asset, and if the downward trend continues, VET might see a painful 55 percent drop from its present price.
Keep in mind that between June 21 and June 22, VET dropped by roughly 40%./n
