Following 60% Retracement, VeChain Screams Buy as Technicals Turn Bullish
- VeChain has endured a nearly 60% downtrend over the past two months.
- Despite the massive losses incurred, multiple technical indexes suggest that the trend is about to reverse.
- On its way up, VET could find stiff resistance at $0.015 and $0.023.
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While Bitcoin has already made new yearly highs, VeChain prepares to catch up with the rest of the market. The supply chain management token is presenting several bullish signals across multiple time frames.
VeChain Prepares a Comeback
VeChain has gone through a significant corrective period over the past two months. After rising to a new yearly high in early August, VET saw its price plummet nearly 60%, going from $0.023 to $0.0097.
Despite the massive losses incurred in such a short period, it seems like the supply chain management token is preparing for another run-up.
VeChain has formed several Doji candlesticks over the past three weekly trading session. This type of candlestick pattern indicates that the bear trend is weakening over time, increasing the potential for a trend reversal.
Moreover, the TD sequential index is currently on a red eight candlestick and will likely present a buy signal in the form of a red nine candlestick next week. The bullish formation would signal a one to four weekly candlesticks upswing or the beginning of a new upward countdown.
If validated, VeChain may be on the cusp of a major breakout to new all-time highs.
The moving average convergence divergence, or MACD, on VET’s 3-day chart can be used to confirm the optimistic outlook. Each time this technical index turned bullish over the past year, a new uptrend began.
For instance, after the MACD’s 12-day exponential moving average moved above the 26-day exponential moving average in May and April 2019, VeChain skyrocketed over 100%. A similar price action took place in mid-April this year, but the crossover resulted in a 580% rally.
Now, this technical index is about to turn bullish, adding credence to the TD setup’s outlook.
Before VeChain rises from the grave, however, it must turn the 50-day moving average into support.
This resistance barrier has managed to reject any upward price action since late August. Slicing through it could be one of the first confirmation signals for the macro bullish outlook.
On its way up, the next critical areas of resistance are the 100-day moving average at $0.015 and the recent yearly high of $0.023.
It is worth noting that the bearish outlook cannot be disregarded because of the cryptocurrency market’s unpredictability. VeChain must continue to trade above the 200-day moving average.
Failing to do so will likely jeopardize all the positive signals previously mentioned and lead to a downswing towards $0.008.
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