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The VeChain (VET) price reclaims a crucial horizontal support level and breaks out from a diagonal one.
If the price successfully does these two things, it will confirm that the trend is bullish. In that case, the local low will hold, and a significant upward movement will follow over the next few months.
Will VeChain Price Reclaim Critical Support?
The weekly time frame outlook shows that the VET price has fallen considerably since its all-time high of $0.278 in April 2022. Two weeks ago, the drop culminated with a new yearly low of $0.021.
However, the price action since then has been extremely bullish. The VET price is in the process of creating a bullish engulfing candlestick, which would negate the majority of the decrease from the last two weeks. More importantly, if the current close holds, the price will reclaim the $0.015 horizontal area and validate it as support.
This would make the previous drop a deviation (green circle). This is a very bullish sign that often leads to upward movements.
Additionally, the weekly RSI shows bullish signs. Traders utilize the RSI as a momentum indicator to assess whether a market is overbought or oversold and to determine whether to accumulate or sell an asset.
If the RSI reading is above 50 and the trend is upward, bulls still have an advantage, but if the reading is below 50, the opposite is true.
Even though the indicator is still below 50, it has generated a significant bullish divergence (green line). This is an occurrence when a drop in momentum does not accompany a price drop. It often leads to significant upward movements.
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VET Price Prediction: Ongoing Breakout Could Accelerate Increase
Similarly to the weekly time frame readings, the technical analysis from the daily time frame supports the continuing increase but does not confirm it. The reasons for this come from the price action, RSI readings, and wave count.
The daily RSI has increased sharply over the past ten days and has nearly moved above 50. This is a bullish sign that suggests the trend is bullish. However, the movement is not confirmed yet.
Similarly, the price is in the process of moving above a descending resistance line that has been in place since April 17. Likewise, this breakout has not been confirmed yet.
Finally, the Elliott Wave count shows a completed W-X-Y correction. The theory, employed by technical analysts, involves the analysis of recurring long-term price patterns and investor psychology to determine the direction of a trend.
If the count is correct, the price will continue increasing to at least $0.035 and will reclaim the long-term $0.017 support.
Despite this bullish VET price prediction, a drop below the local low (red line) of $0.014 will mean that the trend is still bearish. In that case, a drop to $0.010 will be on the cards.