VeChain’s price structure has changed from a bear flag to a head-and-shoulders pattern, which is comparable to what it was a month ago.
As the 50-day simple moving average (SMA) approaches the 200-day SMA, VET is approaching a bearish Death Cross formation.
Despite reduced prices, daily volume has continued to decline, indicating less interest in the cryptocurrency.
Yesterday, the VeChain price initiated a head-and-shoulders topping pattern, confirming the price structure’s fragility since the June 22 bottom. The slight VET rally today did not change the bearish view, and all data points to at least a breach of the $0.059 low set on June 22.
From May 23 to June 19, the VeChain price formed a head-and-shoulders pattern that began with a rising wedge shape. The topping pattern resulted in a nearly -40 percent decrease in VET over three days, with a -25.57 percent selloff on June 21. The magnitude of the drop matched the observed move of -39.72 percent in the head-and-shoulders pattern.
After the June 22 low, VeChain price formed a new head-and-shoulders pattern, which was triggered yesterday. The present pattern’s assessed move is just over -27 percent, implying a price target of $0.053. The VET drop would demolish the bottom set on June 22, but it would still be much above the crash low of $0.042 set on May 19. It should, however, eventually cause an oversold reading on the daily Relative Strength Index (RSI), laying the groundwork for a long-term, impulsive rally.
Chart of the VET/USD pair on a daily basis
VeChain price needs a daily close above the high of the right shoulder at $0.079 to avoid the bearish outcome predicted by the head-and-shoulders pattern. VET would be prepared to target the Anchored VWAP from January 3 at $0.088 and then the challenging 200-day SMA at $0.092, signifying a 27 percent rally from the current price if it is successful.
The VET rebound will struggle past the 200-day SMA, as the 50-day SMA is on the verge of triggering a bearish Death Cross pattern, implying increased negative pressure on VeChain pricing.
If the previous head-and-shoulders pattern is followed, VeChain price will at least hit the measured move price goal of $0.053 before printing a firm low./n
