Following some relief last weekend, VeChain(VET) continues to follow the cryptocurrency market’s downtrend. Recently, the cryptocurrency broke through a key support level and appears poised to increase its downward price action.
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At the time of writing, VET’s price trades at $0.022 with a 3% and 32% loss over the last 24 hours and the past month respectively.
Justin Bennett, a crypto analyst says VeChain broke below $0.024. As seen below, this area was the last line of resistance for a “neckline” or a trendline that saw VET’s price after an increase in previous selling pressure.
The analyst thinks that bulls are not losing everything, provided VeChain holds above $0.021. This area is a “much more significant support for the market”.
In case of further downside action, VET’s price could drop into this support line before seeing some relief. A bullish continuation could be possible if the price rises above the neckline.
However, traders should wait for confirmation if VET’s price can return to $0.024 and then to $0.026. $0.028 is a strong resistance area.
Bennett thinks it is more likely that VeChain will maintain its downward trend.
The resistance for VET stands at $0.0237. This is below the neckline that it crossed yesterday. The market appears to be relatively weak overall. Even if there is some relief, I believe a move of at least $0.016 would make the most sense.
Trader should be on the lookout for trading volumes that are below $0.022 or lower than current levels. Analysts could warn traders that this may indicate potential losses at the level mentioned.
How can VeChain be saved in the long-term?
NewsBTC has reported that VeChain was currently in the process for deploying a major consensus upgrade. This will allow corporations to use the VeChainThor cryptocurrency and could also inject capital into the community. However, this will positively impact VET’s price over the long run.
In the short term, Bennett claims the current macro conditions don’t support bullish momentum in the crypto market. The analyst recently pointed out a “Head and Shoulders” pattern formed on the crypto market total capitalization 4-hour chart.
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These losses often occur before further losses of a particular asset. The crypto market capitalization currently exceeds $800 billion. If this pattern holds, it could fall to $700 billion. At current levels, any long position seems at risk. Bennett explained:
The $TOTAL example is an excellent example of using a failing head and shoulders in your favor. The failure presented a limited opportunity. Because of the downtrend, I didn’t think it was possible to prolong this. It would fail, I always expected it.