While the market waits for a volatility spike that will kick-start a new uptrend, VeChain has stolen the spotlight with new all-time highs.
VeChain Enters Price Discovery
VeChain made headlines after rising to a new all-time high of $0.0643 on Monday, Mar. 8. The milestone was achieved following a spike in buying pressure at a crucial support level that saw the price of VET rise by more than 75% in the past week.
Now that VeChain has entered price discovery mode, the Fibonacci retracement indicator suggests that its price has more room to go up before the next meaningful correction. VET only needs to close decisively above the $0.061 support level to advance higher.
Under such circumstances, a further increase in demand could push VeChain towards the 127.2%, 141.4%, or 161.8% Fibonacci retracement level. These important interest areas sit at $0.069, $0.072, and $0.078, respectively.
Warning Signals Pop Up
Even though the odds seem to favor the bulls, other technical indexes suggest that VeChain’s uptrend is nearing exhaustion.
The Tom Demark (TD) Sequential indicator is about to present a sell signal on VET’s daily chart. The bearish formation will likely develop in the form of a green nine candlestick.
Such technical development tends to be followed by a one to four daily candlesticks retracement before the uptrend resumes.
The Relative Strength Index (RSI) also suggests that VeChain sits in overbought territory. This momentum indicator created a bearish divergence as it made a series of lower highs, while VET’s price created a series of higher highs.
Given the ambiguity that VeChain presents, the $0.061 level is the most critical support point to watch. A daily candlestick close above or below that price point will determine where VET heads next.
While the bulls prepare for an upswing to $0.070, the bears could target $0.050 if the $0.061 support level fails to hold.
Disclosure: At the time of writing, this author owned Bitcoin and Ethereum.