VeChain (VET) is roaring back to life with a vengeance! After surpassing a key resistance level at 3.25 cents, the token has ignited a wave of excitement among crypto enthusiasts. But is this just a fleeting holiday spark, or is a sustained bull run on the horizon? Let’s dive into the technical analysis and uncover the potential paths VeChain might take in the coming weeks.
The weekly chart paints a vibrant picture of a potential five-wave Elliott Wave structure in play. With the daily chart currently targeting a 1.618 Fibonacci level at 4.456 cents, bulls are undoubtedly in the driver’s seat.
Adding fuel to the fire, the upper channel of the Gann Channel has transformed into a solid support line, further bolstering the bullish narrative. This technical indicator, often used to predict future price movements, seems to be whispering sweet nothings of continued upward momentum.
200 EMA Breakthrough:
Speaking of bullish whispers, the weekly timeframe reveals a decisive breakthrough above the 200 EMA, a classic indicator of long-term bullishness. However, a cautious note emerges from historical Gann Channel data, suggesting a potential pullback before another leg up.
Analysts anticipate a retracement of around 61.31%, potentially bringing VET back to the lower Gann Channel band for a retest. But fear not, bulls! This dip could be a prime opportunity to accumulate more VET before the next surge, with the daily 1.618 level at 4.456 cents and liquidity support around 4.53 cents acting as temporary safety nets.
Despite the alluring upward trajectory, a shadow of doubt lurks in the form of technical indicators. Both the RSI (79.24) and Stochastic oscillator are flashing overbought signals, hinting at a potential correction in the near future.
Adding to the uncertainty is the relatively low trading volume accompanying this price surge. Compared to previous bull runs, the current volume appears anemic, raising concerns about the sustainability of the rally.
Buckle up, because things are about to get bumpy! The Cheeky Cipher, another technical analysis tool, points towards increasing volatility and a potential pullback in the near future. Keep your eyes peeled for a red print on the Cheeky Cipher, as it could be a signal to consider shorting VET in the market.
Corrective Calm Before the Storm?
The daily chart suggests a corrective five-wave move is currently underway, with further upside expected before a natural Wave 4 retracement. So, while a temporary dip shouldn’t dampen your spirits, it’s wise to prepare for the inevitable ebb and flow of the crypto market.
As we approach the holiday season, remember to trade with caution and implement tight stop losses to mitigate potential losses. With a watchful eye on the Gann Channel and the Cheeky Cipher, you’ll be well-equipped to navigate VeChain’s price action throughout the festive period and beyond.
Merry Christmas and happy trading!