Cryptocurrency price

VeChain (VET) price action set to continue south

– Despite the bullish momentum, the warning signs of a bearish continuation persist.

– The oscillator values ​​warn against further downward pressure.

VeChain Daily Ichimoku Chart (VET)

”VeChain

Above: VeChain (VETUDS)

VeChain has seen incredible momentum over the past five days. Since opening Wednesday at $ 0.082, VeChain has hit $ 0.117 – a gain of + 42.7%! However, there is some evidence that a bull trap could be underway.

While VeChain (VET) peaked above Tenkan-Sen, Kijun-Sen and Senkou Span B, it is currently inside the Cloud. The buyers were unable to push VeChain to a level where the Lagging Span would have closed above the candlesticks. Instead, the candlesticks seemed to act as resistance and handily rejected any further progress from the Lagging Span. Additionally, the 38.2% Fibonacci retracement of the September 28, 2021 low of $ 0.082 to the solid bar of the $ 0.153 swing high on September 7 acted as resistance. A high volume node near the 38.2% Fibonacci retracement also contributed to resistance.

Oscillators provide evidence that further upside potential is limited and may have a reversal imminent. The two red arrows on the candlestick chart formed from the highs developed on September 7th and 16th and descended towards the current daily candlestick. The corresponding peaks in the composite index show ascending arrows from these exact dates. As a result, we can see that the candlestick chart is showing lower highs, but the composite index is showing higher highs. This is a condition known as Hidden Bearish Divergence and is a warning that the current uptrend is “false” and selling pressure is likely to continue.

The Relative Strength Index, likewise, shows evidence of a resumption in selling pressure. As a result, I moved the relative strength index into bearish market conditions. You can see how the Relative Strength Index created a rounded top from the first overbought condition in a bear market: 55. Additionally, the Optex bands – although not at an overbought extreme – have leveled off and now show a slight slope to the south. The combination of this “pause” in the direction of both the Relative Strength Index and the Composite Index shows that the current bullish move is likely to end.

bannerThe more likely scenario is a return to test VeChain’s short-term support at previous lows and an 88.6% Fibonacci retracement at $ 0.082. If an even deeper and continued corrective move were to occur, a return to $ 0.05 is the next low to test. Buyers will need to show strong conviction to eliminate any short-term bearish outlook by pushing above the Cloud to close around $ 0.13. This will place the price above the cloud and the lag above the candlesticks and into open space. From there, the road to new all-time highs is almost inevitable.

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