VeChain has suffered a 5.72% price drop over the past 24 hours of trading. VEN is
currently exchanging hands around $1.54 after experiencing a 5% price hike over the past 7 trading days.
VeChain is commonly describes as a trust free and distributed business ecosystem that is self-circulating and scalable. It takes the label of the blockchain for products and information.
Founded by the former Louis Vuitton China CIO Sunny Lu, the VeChain ecosystem is designed to help reduce the inefficiencies involved in supply chain management. It will achieve this through its VeChain Identity (VID) technology which will be used to mark and track products. This assigns all products within a supply chain with a unique identifier. This identifier can then be written to an NFC tag, QR code or RFID tag which will help suppliers, manufacturers and consumers to authenticate that the products they are receiving are real and as expected.
The blockchain is immutable, so this will help to greatly reduce the number of counterfeit products within many industries. This method of asset digitisation is tamper proof and consumers and producers are able to verify the quantity and quality of a product.
VeChain have already secured some major partnerships including companies such as BitOcean, PWC, Renault, Microsoft and BMW.
Let us continue to analyse price action for VeChain over the long term.
VEN/USD – LONG TERM – DAILY CHART
Analysing the market from the long term perspective above, we can see that VEN/USD had experienced a major bullish rally toward the end of 2017. In this rally, price action started from a price low of $0.33 on the 7th of December 2018 and extended to an all time high of $9.71 on the 22nd of January 2018. This was a price increase totalling 2260% from low to high.
We can see after placing this all time high price action went on to roll over and began to depreciate rapidly. We can see that it had originally found support at the .618 Fibonacci Retracement level priced at $3.94 in February 2018. This Fibonacci Retracement is measured from the entire bullish run outlined in the paragraph above.
We can see that as March began trading, price action continued further lower. We can see that the market fell below the 100 day moving average and continued until support was found at the .786 Fibonacci Retracement level priced at $2.36. This level provided significant support as the market went on to rally from this price level. Price action went on to make a new high of $5.40 in April but failed to sustain this rally throughout June 2018.
We can see that throughout June and July, price action went on to decline eventually falling even further below support at the .786 Fibonacci Retracement priced at $2.36 until finding current support marked by the .886 Fibonacci Retracement level priced at $1.42. We can see that this level has proved itself throughout August as price action has not yet penetrated below it.
Let us continue to analyse price action a little closer over the more recent period to highlight any further support and resistance zones.
VEN/USD – SHORT TERM – DAILY CHART
Analysing price action from the benefit of a more recent time frame, we can see that the last few months have been brutal to the market. Since rolling over in May, price action has continued to decline for the following four months to where it is trading today.
We can see that the support provided by the long term .886 Fibonacci Retracement priced at $1.42 is bolstered by a downside 1.618 Fibonacci Extension (drawn in pink) and another shorter termed 1.414 Fibonacci Extension (drawn in blue) both priced at the same price level. This area of support should provide a significant level of pressure for the bears to be able to overcome over the short term.
In the scenario that the bears to manage to push price action below the $1.42 handle, we expect immediate support to be located at a short termed downside 1.272 Fibonacci Extension level (drawn in black) priced at $1.20. Further support below this is expected at the short term downside 1.414 Fibonacci Extension level (drawn in black) priced at $1.01 and the longer termed downside 1.618 Fibonacci Extension level (drawn in blue) priced at $1.00.
Alternatively, if the bulls manage to push price action above the $1.70 handle, we expect immediate support to be located at the previous downside 1.414 Fibonacci Extension level priced at $1.96 followed by the $2 handle psychological resistance. Further resistance above this level is expected at the long term .786 Fibonacci Retracement level priced at $2.36. This area of resistance is signifcantly bolstered by the 100 day moving average which is currently hovering at the same price level.
The technical indicators within the market are still favouring the bears at this moment in time, however, they are starting to show some signs of promise toward the bulls. The RSI is trading below the 50 handle but has risen out from extreme oversold conditions which shows that the previous bearish momentum is showing signs of failure. If the RSI can have a sustained break above the 50 handle then this would signal that the bulls are starting to regain momentum within the market.