Introduction:
In my earlier articles & videos, I discussed Vechain's formation of a significant down channel on the daily time frame chart. Today, we'll take a closer look at the latest developments as Vechain approaches critical resistance levels and the potential for a breakout.
Approaching the Resistance: A Crucial Moment for Vechain
Recently, Vechain has been moving close to the resistance of the long-term down channel. This was the focus of my last video, and now, if we examine the live daily time frame chart, we can see that the price is nearing this resistance level. Simultaneously, Vechain is attempting to break out of a long-term resistance zone that spans from 2.3 cents to 2.66 cents.
For detailed analysis, you can also watch the below video:
Long-Term Resistance Zone: A Key Barrier
On the weekly time frame chart, this resistance zone (from 2.3 cents to 2.66 cents) has historically been significant, acting as both support and resistance. In the past, it served as support during multiple occasions and now, it’s once again functioning as a resistance level. The price has broken below this zone previously and is now attempting to reclaim it.
Double Bullish Divergence: A Positive Signal
Adding to the bullish outlook, there is a double bullish divergence visible on the 7-day time frame chart. While the price formed a lower low, both the Stochastic and RSI indicators formed higher lows, suggesting a potential reversal. The price has followed this divergence, moving upwards, and is now testing the resistance of the down channel.
Breaking Out of the Down Channel: What to Expect
For the past several days, since September 15, 2024, Vechain's price has been trapped within this down channel. During this downtrend, it also broke a significant uptrend line that previously provided strong support. If Vechain manages to break out of the down channel, the technical target for this breakout would be around 5.2 cents.
The $0.052 Cents Resistance: A Major Hurdle
The 5.2 cents level is a critical resistance point on the 7-day time frame chart. In the past, it has acted as both support and resistance. If Vechain breaks out of the down channel, reaching this level could present a significant challenge. However, if the price can overcome this resistance, it could pave the way for further upward movement.
The Bigger Picture: A Massive Long-Term Target
On the 7-day time frame chart, Vechain has already achieved a substantial breakout from a long-term falling wedge pattern. Following this breakout, the price experienced a 37% pump but has yet to reach the full technical target of the wedge. This target lies between $0.28 and $0.30, offering a significant upside if Vechain can sustain its momentum.
Conclusion: Watch for the Breakout
Vechain is approaching critical resistance levels that could determine its next major move. The combination of the down channel resistance, the long-term resistance zone, and the double bullish divergence are all factors to watch closely. If Vechain can break through these barriers, it could trigger a substantial rally.
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