Does the Recovery Have Legs?

The VeChain price has gained 25% this week as Bit­coin leads the cryp­tocur­ren­cy mar­ket high­er, but can VET main­tain the momentum?

VeChain (VET) has turned high­er this week as con­fi­dence returns to the beat­en-down cryp­to mar­ket. Bitcoin’s recov­ery to $51,000 has spurred a wave of alt­coin buy­ing, help­ing many assets pare the loss­es sus­tained ear­li­er in the month. But although VET is inch­ing high­er, it’s still down 50% from the Novem­ber high and 65% below May’s record of $0.2798. Due to its recent slug­gish per­for­mance, VeChain is los­ing ground against rival cryp­tocur­ren­cies. The projects mar­ket cap has dropped from a peak of $16.8 bil­lion in May to approx­i­mate­ly $5.6 bil­lion, rank­ing VET the 31st most valu­able cryp­tocur­ren­cy. Fur­ther­more, although the VeChain price is attempt­ing to push high­er, con­sid­er­able over­head resis­tance blocks the path to the all-time high.

VET Price Forecast

The dai­ly chart shows that VET has turned high­er from the high­light­ed sup­port chan­nel. As a result, the token has cleared the resis­tance (now sup­port) of the 50-DMA at $0.0909. Addi­tion­al­ly, the Rel­a­tive Strength Index (RSI) of 49.50 shows that bull­ish momen­tum is pick­ing up. How­ev­er, the upper Bollinger Band at $0.0963 is sti­fling VET’s progress for now. 

As long as VeChain remains above the 50-DMA, the out­look is con­struc­tive, tar­get­ing the 200-DMA at $0.1163, although exten­sions above the upper BB are usu­al­ly unsus­tain­able. For that rea­son, I expect a ral­ly to be short-lived. 

Nonethe­less, the price action sug­gests the near term direc­tion is high­er, towards the 200-DMA. How­ev­er, a close below the 50-DMA at $0.0909 inval­i­dates the opti­mistic thesis.

VeChain Price Chart (Daily)

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