Yerevan (CoinChapter.com) — VeChain’s native token VET is one step away from logging a 30 percent upside move based on its natural responses to certain technical indicators and levels in recent history.
In retrospect, the 21st-largest cryptocurrency by market capitalization bounced off a critical support range—spanning between $0.091 and $0.099—late last week. Meanwhile, the rebound move also appeared off ascending trendline support that constitutes a symmetrical triangle pattern in the conjugation of descending trendline resistance.
Eventually, the upside retracement led the VET/USD exchange rate higher by a little over 23 percent, right into its 20-day exponential moving average (20-day EMA; the green wave in the chart below). However, the pair halted its upside moves near the 20-day EMA as of this Tuesday.
VeChain showed an underlying weakness in its rebound rally. While the VET/USD surged higher, the pair’s daily trading volume on Binance declined, signaling a weakening upside momentum. The bull trap increased VET’s chances of pulling back lower to retest the ascending trendline-horizontal price range support confluence, with the 200-day simple moving average (200-day SMA; the orange wave) serving as the primary downside target.
The bearish setup provides traders ample opportunities to make profits from a short position towards the support range-ascending trendline support confluence. Meanwhile, those with risky appetites could extend their exit targets towards the 200-day SMA. This is not trading advice but an opinion. Please maintain your stop losses against the direction of your trades to minimize losses in case of a bias reversal event.
That bullish outlook for VeChain traders
Bitcoin’s recent rally after Elon Musk’s change-of-heart towards the idea of accepting the cryptocurrency as payment for its Tesla electric vehicles has led its prices above a key resistance level of $40,000. So far, BTC/USD has been maintaining the psychological price ceiling as newfound support. Should it continue to do so, it could leave altcoins with upside potential.
That said, VeChain’s VET can also benefit from a market-wide recovery trend, at least in the short-term.
So the bullish setup goes like this: the VET/USD exchange rate either breaks above the 20-day EMA or pulls back towards the ascending trendline support for a stronger rebound towards and above the 20-day EMA. In either case, the pair would likely target the resistance range-50-day SMA (the blue wave). That’s 30 percent upward.
Meanwhile, an extended upside momentum would put VET en route to the descending trendline resistance—that is more than 75 percent higher from where the VeChain token is trading at this moment (~$0.114).