coinedition.com
VeChain (VET) experienced a significant price drop, plummeting 40.93% since mid-July, as highlighted by crypto analyst Cheeky Crypto in a YouTube video. However, technical analysis reveals an oversold RSI of 24, flashing a potential buying opportunity for savvy investors.
The divergence between VeChain’s price action and its oversold RSI presents a compelling puzzle for analysts. Does this signal a bullish reversal, or is the market’s bearish grip too strong?
However, the current price action for VET suggests that the worst may not be over. As the token forms a new daily lower low, the critical area for a potential reversal is identified between 1.56 and 2.698. This decline might be part of a broader triple zigzag pattern rather than a simple impulsive breakdown.
Adding to the bearish sentiment, VeChain has lost support from key moving averages. However, smart money appears to see value in the “green zone” between $2.06 and $2.398.
The ongoing bearish sentiment aligns with the psychology of price movements, where institutional investors might be setting up for a wave one, followed by a wave four dip. Retail investors, on the other hand, often buy in during wave five, creating liquidity that can drive the final rally.
Currently, the market sentiment around VeChain is overwhelmingly bearish, resembling a wave two correction. Retail investors tend to buy during wave fives, while institutional investors usually exit during wave threes, leading to subsequent dips.
Vechain/USD 1-day price chart, Source: Trading view
Momentum indicators and the relative strength index (RSI) suggest that the correction could be nearing its end. The 1-day RSI for Vechain is at 24.38, indicating the token is oversold. This might signal a potential buying opportunity for traders.
In addition to these technical indicators, the 1-day MACD is trading below the signal line, which suggests a possible short-term downtrend. Despite the current negative market sentiment, the long-term prospects for VeChain remain optimistic. The live price of VeChain today is $0.020424, with a 24-hour trading volume of $65,751,056. Vechain has experienced a 13.98% drop in the last 24 hours.
VeChain’s recent price action has sparked concern among investors. However, technical indicators and market psychology suggest a potential reversal could be on the horizon.