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The VeChain (VET) price increased by 12% on September 13, likely catalyzed by a Coinbase listing announcement.
While the price has created a bullish pattern, the reaction to the $0.016 area will be critical in determining whether the pattern will materialize.
Can VeChain Price Reclaim Horizontal Support?
The weekly timeframe technical analysis for VET gives mixed readings.
The price fell below the $0.016 horizontal area in June but reclaimed it (green circle) almost immediately afterward. This is a bullish sign that often leads to significant upward movements.
However, this was not the case for VET since the price is at risk of falling below the area again. Whether it does fall below it or creates a higher low and reclaims it again will be key in determining the future trend.
A close below the area will likely lead to a 35% drop to the next support at $0.010. On the other hand, reclaiming the area can lead to an 80% increase to the $0.028 resistance.
The weekly RSI provides a mixed reading. While the indicator is still below 50, it also moves upwards, creating a higher low.
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.
When the RSI is above 50 and rising, it suggests that buyers have the upper hand, indicating an uptrend and potential buying opportunities. Conversely, when the RSI is below 50 and declining, it implies that sellers have more control, signaling a downtrend and potential selling opportunities.
VET Price Prediction: Will Double Bottom Materialize?
On September 12, Coinbase announced that it would add support for VeChain and VeThor beginning the next day. The announcement caused a 12% price increase.
More importantly, it confirmed a double bottom pattern (green icons) relative to the price on August 17. The double bottom is considered bullish, leading to upward movements most of the time.
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The pattern becomes even more relevant when factoring in the RSI. The indicator generated significant bullish divergence during the bottoms (green line). This is a bullish development in which a momentum increase accompanies a price decrease. It often leads to sharp upward movements, as was the case for VET.
To confirm the pattern, VET has to break out from a descending resistance line that has been in place since the beginning of July. Since the line also coincides with the $0.016 horizontal area, a breakout above it will confirm the bullish trend reversal.
Therefore, the future VET prediction will be determined by whether the price reclaims the $0.016 level or gets rejected by it. An 85% increase can occur in the event of a reclaim, while a 35% drop is likely if the price gets rejected.