- VeChain’s breakout above the descending channel positions it for a potential rally towards $0.05.
- Market activity suggests cautious optimism despite declining social dominance.
VeChain (EFP) recently broke out of its multi-year descending channel, generating renewed bullish optimism and attracting considerable attention.
However, at press time, VET was trading at $0.03254, reflecting a 0.82% decline over the past 24 hours.
The token rose from $0.035 in recent days and social dominance increased from 0.242% the day before to 0.181%. Despite these declines, can VET maintain its breakthrough and move towards $0.05?
2 factors suggest a bullish continuation
VET’s breakout positioned it near the key resistance level of $0.035. A strong daily close above this level could pave the way for a rally to $0.05, a major target supported by the 4.236 Fibonacci extension level.
However, the Fibonacci retracement also highlighted $0.0319 as an important support zone in case of price consolidation.
On the daily chart, the Relative Strength Index (RSI) stood at 64.8 at press time. While this means momentum remains bullish, it also indicates a cautious approach as VET approaches overbought territory.
Therefore, if the buying activity strengthens, the price could break above the resistance levels and continue its upward movement.
Source: TradingView
Social dominance reflects a mixed feeling
VET’s social dominance increased from 0.242% the day before to its level of 0.181% at press time.
This significant decline reflects a reduction in discussion around VET on social platforms, which could slow speculative interest.
Therefore, higher engagement and renewed social activity are required to maintain momentum and attract more traders to the market.
Source: Santiment
Liquidation Data Reveals Potential Volatility
Liquidation metrics show that $41.5k of long positions were liquidated, compared to just $5.96k of short positions.
This imbalance suggests that bullish traders still dominate, but it also highlights the potential for volatility. If long-term liquidations increase further, this could negatively impact the VET’s ability to maintain its current levels.
Source: Coinglass
Open interest indicates growing confidence
Open interest in VET increased by 0.69%, reaching $48.94 million. This steady increase reflects growing trader confidence and market activity around VET.
Although rising open interest often supports sustained price movements, it can also lead to increased price volatility, particularly as VET approaches critical resistance levels.
Source: Coinglass
Will the VET hold its breakthrough?
VeChain’s exit from the descending channel has positioned it for a potential rally towards $0.05.
Read VeChain (VET) Price Prediction 2024-25
However, the decline from $0.035 and the reduction in social dominance suggest that it is difficult to maintain momentum.
IIf VET closes above $0.035 with renewed volume and engagement, a rally to $0.05 is likely. However, failure to maintain current levels could lead to consolidation in the short term. For now, the bias remains cautiously bullish.
