- VeChain price knocked to the technical ground but closed yesterday with a bullish hammer candlestick pattern.
- Weekly Relative Strength Index (RSI) is still overbought.
- VeChainThor is enabling companies to build high-quality and expandable decentralized projects.
VeChain price mounted a tremendous rebound yesterday, but collective weakness in the cryptocurrency market may lead to some residual selling in VET over the next couple of days. However, the channel’s upper trend line should contain the selling.
VeChain price to retake relative strength leadership
VET advanced in a rising channel from late November 2020 until mid-February before going parabolic earlier this month. The collective sell-off in the market halted the advance, sending VET lower.
The decline culminated in yesterday’s massive bullish hammer candlestick pattern. The low of the day nearly touched the 61.8% Fibonacci retracement of the cup-with-handle pattern breakout on January 3 and was built on the fourth largest daily volume in 2021, raising the odds it was the end of the 50% implosion.
Most major sell-offs experience some residual selling after rebounding, and it is anticipated over the next couple of days. A trade above yesterday’s high at $0.214 will confirm a new VET rally that should carry it to the all-time high of $0.282. Along the way, the digital token will confront some resistance at $0.220 and $0.253.
One caveat to the bullish thesis is the current high readings on the daily and weekly RSI. Flash-like declines never release the overbought conditions that often suffocate sustainable rallies, so a bearish momentum divergence can be anticipated when VET price reaches new highs.
VET/USD daily chart
For the thesis to be invalidated, it would require a complete retracement of yesterday’s rebound, which is highly unlikely considering the daily chart framework.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.