VeChain (VET) surged 15% in 24 hours and 48% from last Wednesday, driven by the Bitcoin rally and capital rotation into altcoins. Daily trading volume exceeded its 20-day average since last Wednesday. While the rally may extend another 10%, the altcoin remains in a long-term downtrend. Analysts caution that Bitcoin approaching a key supply zone raises sell-off risks. Liquidation data shows key zones breached, and open interest indicates buying pressure. Traders are advised to lock in profits unless VET breaks above $0.0081, which would confirm a bullish trend shift.
VeChain rallied 15% in the past 24 hours and is up 48% from Wednesday, the 19th of August. The altcoin’s explosive gains came alongside the Bitcoin rally and the bullish confidence the move imparted to the altcoin market.
The daily trading volume of VET has been high, compared to its 20-day average, since last Wednesday. Capital rotation into altcoins spurred the VeChain token prices higher, leading to increased speculative interest.
Bullish speculative activity has helped keep the momentum going. An important question for holders and traders now is whether the move can continue or if it is time to start taking profits.
As Bitcoin approaches a key supply zone, the chances of a sell-off increase. VeChain has been in a long-term downtrend, and the consolidation phase in July and the first half of August below the $0.050 resistance zone was decisively ended.
A local high at $0.0055 was flipped to support in recent days, and the buyers continued to send prices soaring. The swing structure, captured by the Fibonacci retracement levels, was bearish despite the recent rally.
The golden pocket between the 61.8%-78.6% retracement levels at $0.00619 and $0.0073 is being tested at the time of writing. Since the latter level is 10% away from current market prices, the rally could continue before facing rejection.
The bearish bias is warranted, given the long-term downtrend and the bearish swing structure. Examining the liquidation heatmaps, the key magnetic zones around $0.005 and above $0.0062 were both breached decisively.
There are no significant liquidation levels built up overhead over the past three months. The trading volume and open interest uptick showed buying pressure in the spot and perpetuals markets.
If this continues, a bullish structure break is possible. But until then, traders and investors can opt to remain safe and lock in any profits they have made. A breakout past $0.0081 will confirm a bullish trend shift.
