- If VeChain breaks above the descending channel, a potential rebound towards $0.05 is possible.
- Market activity suggested cautious optimism despite declining social dominance.
VeChain (VET) It recently broke a multi-year bearish channel, sparking renewed bullish optimism and garnering significant attention.
However, at the time of press, VET was trading at $0.03254, down 0.82% in the last 24 hours.
The token recently fell from $0.035, and its social dominance decreased from 0.242% the previous day to 0.181%. Despite this decline, can VET sustain the breakout and head towards $0.05?
Two factors point to continued strength
VET’s breakout brought it closer to the key resistance level of $0.035. A daily close above this level could pave the way for a bounce to $0.05, the key target supported by the 4.236 Fibonacci extension level.
However, the Fibonacci retracement highlighted $0.0319 as an important support area if prices consolidate.
On the daily chart, the Relative Strength Index (RSI) stood at 64.8 at press time. While this means momentum remains strong, it also signals a cautious approach as VET approaches overbought territory.
Therefore, if buying activity intensifies, the price may break the resistance line and continue the upward trend.
Source: TradingView
Social dominance reflects mixed emotions.
VET’s social dominance decreased from 0.242% the previous day to 0.181% at press time.
This sharp decline may indicate a decline in discussion of VET on social platforms, possibly slowing down speculative interest.
As a result, higher participation and new social activities are needed to maintain momentum and attract more traders to the market.
Source: Santiment
Liquidation data reveals potential volatility.
According to liquidation indicators, $41.5K worth of long positions were liquidated while shorts accounted for only $5.96K.
This imbalance suggests that optimistic traders still dominate, but also highlights the potential for volatility. Any further increase in long-term clearing could have a negative impact on the ability of VET to maintain current levels.
Source: Coinglass
Open Interest helps boost your confidence.
VET open interest increased 0.69% to $48.94 million. This steady increase indicates that trader confidence in VET and market activity are increasing.
An increase in open interest often supports sustained price movements, but it can also lead to increased price volatility, especially when VET approaches significant resistance levels.
Source: Coinglass
Will VET have a breakthrough?
VeChain’s breakout of the descending channel opens the door for a potential bounce towards $0.05.
Read VeChain (VET) Price Prediction for 2024-25
However, with the drop from $0.035 and declining social dominance, it had trouble maintaining momentum.
meIf f VET closes above $0.035 with new volume and participation, it is likely to rise to $0.05. However, failure to maintain current levels could lead to short-term consolidation. For now, the bias is cautiously optimistic.