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Cryptocurrency Price Forecast: VeChain (VET) Price Action Likely To Continue South

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

– Oscillator values warn of further downside pressure.

VeChain (VET) Daily Ichimoku Chart

”VeChain

Above: VeChain (VETUDS)

VeChain has had some incredible momentum over the past five days. From the Wednesday open at $0.082, VeChain has moved as high as $0.117 – a +42.7% gain! However, there is evidence that a bull trap could be in progress.

While VeChain (VET) has spiked above the Tenkan-Sen, Kijun-Sen, and Senkou Span B, it is currently inside the Cloud. Buyers could not push VeChain to a level where the Lagging Span would have closed above the candlesticks. Instead, the candlesticks appeared to act as a resistance and handily rejected any further progress by the Lagging Span. Additionally, the 38.2% Fibonacci retracement from the September 28th, 2021 low of $0.082 to the strong bar of the swing high of $0.153 on September 7th has acted as resistance. A high volume node near the 38.2% Fibonacci retracement contributed to the resistance as well.

The oscillators provide some evidence that further upside potential is limited and may have an imminent reversal. The two red arrows on the candlestick chart formed from highs developed on September 7th and September 16th and sloped down to the current daily candlestick. The corresponding peaks in the Composite Index show ascending arrows from those exact dates. As a result, we can see that the candlestick chart shows lower highs, but the Composite Index shows higher highs. This is a condition known as hidden bearish divergence and is a warning that the current uptrend is ‘fake’ and that selling pressure is likely to continue.

The Relative Strength Index, likewise, shows evidence of a resumption of selling pressure. As a result, I have shifted the Relative Strength Index into bear market conditions. You can see how the Relative Strength Index has created a rounded top against the first overbought condition in a bear market: 55. Additionally, the Optex Bands – while not at an overbought extreme – have leveled out and now show a slight slope to the south. The combination of this ‘pause’ in direction on both the Relative Strength Index and the Composite Index shows evidence that the current upside move is likely to terminate.

bannerThe most likely scenario is a return to test VeChain’s near-term support at the prior swing lows and 88.6% Fibonacci retracement at $0.082. If an even deeper, continued corrective move were to play out, a return to $0.05 is the next low to test. Buyers will need to show firm conviction to eliminate any near-term bearish outlook by pushing above the Cloud to close around $0.13. This will put price above the Cloud and the Lagging Span above the Candlesticks and into open space. From there, the road to new all-time highs is almost inevitable.

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Source: https://www.exchangerates.org.uk/news/34105/2021-10-05-cryptocurrency-price-forecast-vechain-vet-price-action-likely-to-continue-south.html

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