The crypto market continues on its downtrend, and VeChain (VET) follows after expiring some relief over the last weekend. The cryptocurrency recently breached a major level of support and seems poised to expand its downside price action.
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At the time of writing, VET’s price trades at $0.022 with a 3% and 32% loss over the last 24 hours and the past month respectively.
According to crypto analyst Justin Bennett, VeChain lost a major area of support when it broke below $0.024. As seen below, this area was the last line of resistance for a “neckline” or a trendline that saw VET’s price after an increase in previous selling pressure.
Not everything is lost for the bulls, the analyst believes, as long as VeChain is capable of holding above $0.021. This area is a “much more significant support for the market”.
In case of further downside action, VET’s price could drop into this support line before seeing some relief. If the price manages to get back above the neckline, it could support a bullish continuation.
However, traders should wait for confirmation if VET’s price can return to $0.024 and then to $0.026. Beyond that point, $0.028 seems like a very important area of resistance.
Bennett believes it seems more possible that VeChain will continue on its downtrend:
Resistance for VET is around $0.0237, which is the neckline it broke below yesterday. All in all, the market looks relatively weak. So even if we do see some additional relief, I think a move to at least $0.016 makes the most sense right now.
Traders should watch out for a daily close below current levels or $0.022. This could hint at potential losses targeting the levels mentioned by the analyst.
What Could Save VeChain In The Long Run?
As NewsBTC reported, VeChain is currently in the process of deploying a major consensus update. This could facilitate the corporate adoption of the blockchain VeChainThor and inject fresh capital into the ecosystem. However, this will positively impact VET’s price over the long run.
In the short term, Bennett claims the current macro conditions don’t support bullish momentum in the crypto market. The analyst recently pointed out a “Head and Shoulders” pattern formed on the crypto market total capitalization 4-hour chart.
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This pattern often precedes further losses by a certain asset. The total crypto market cap currently stands above $800 billion and could crash into the $700 billion if the pattern plays out. Any long positions, at current levels, seem at risk, as Bennett explained:
$TOTAL is a perfect example of how to use a failed head and shoulders to your advantage. That failure offered a short opportunity. I never thought to long this because of the established downtrend. I was always expecting it to fail.