- VeChain has dropped below the critical $0.027 support level, putting its bullish inverse head-and-shoulders pattern at risk of failure.
- Despite rising open interest and a slight bullish sentiment in the derivatives market, further downside remains possible if key support levels break.
VeChain (VET) is facing a crucial moment as its price slips below the $0.027 support level, casting doubt on a potentially powerful bullish formation. Is this a minor setback before a strong recovery, or the start of a deeper correction? Let’s break down what’s happening.
VeChain’s Price Struggles Amid Market Momentum
While many altcoins are riding high after Ethereum surged above $2,700, VeChain seems to be lagging behind. The token recently dropped nearly 1% intraday, pushing it below the important $0.027 mark. This dip puts the inverse head-and-shoulders pattern—often a bullish reversal sign—at risk of invalidation, raising concerns among traders.
Technical Breakdown: Key Support Levels Under Threat
On the daily chart, VeChain fell below the 23.60% Fibonacci retracement level at $0.02729. This move reflects a weekly loss of around 1.32%, putting a cap on monthly gains at just under 3%. The price action is currently contained within a falling channel, while the overall structure still hints at a possible inverse head-and-shoulders pattern. The neckline resistance stands near $0.03307.
However, the recent downward push threatens this pattern. A decisive close below the $0.027 level could open the door for a more prolonged correction. Supporting the bearish case, the Relative Strength Index (RSI) has dropped below the 50 mark, signaling weakened bullish momentum.
Immediate support now rests near the descending trendline close to the Supertrend indicator at $0.02572. If VeChain fails to hold this level, the next key supports are $0.02471 and $0.02199, suggesting further downside risk.
Can Bulls Rally Back? Optimistic Scenarios
Despite these headwinds, a rebound within the falling channel could revive bullish hopes and help complete the inverse head-and-shoulders pattern. A successful retest of the neckline at $0.03307 would be a critical step toward recovery.
In a bullish breakout, VeChain could face resistance around the 50% Fibonacci level near $0.03922, potentially fueling a stronger upward rally.
Derivatives Market: Mixed Signals from Traders
Derivatives data reveal a heated battle between bulls and bears. Long liquidations have spiked to $81.59K in the last 24 hours, wiping out many bullish bets, while short liquidations remain minimal. Despite this, open interest has risen slightly to $79.71 million, and the funding rate climbed to 0.0112%, indicating some growing bullish optimism.
The long-to-short ratio at 1.008 reflects a fairly balanced market, highlighting uncertainty in trader sentiment.
VeChain stands at a critical crossroads. Breaking and holding below $0.027 could lead to deeper losses, but a rebound might revive its bullish setup. Traders should watch key support and resistance levels closely as VeChain navigates this delicate phase in the broader crypto market.
