Technical Pick: VeChain (VEN)

Over the weekend, Bitcoin took a beating as it broke through the major $6100 support level formed since the bounce in February. Below this key level there was little stopping BTC from falling to the next major support around the $4800 level. This turned market sentiment incredibly bearish and saw a sharp sell off in the majority of alts. It appears, however, that this move may have been a bear trap as on the 1-hour a substantial positive price spike accompanied by huge volume occurred just as all were losing hope. This price increase has broke BTC back up to the $6200 level, with the previous $6100 level acting as support once more. This lead to BTC closing with a daily hammer candle, often the first signs of a reversal pattern in a bearish market. Significant moves such as these can often indicate the low in a market which is exhausted to the downside. Although until further confirmation can be seen, the market will likely remain cautiously optimistic. If prices can retrace back to the previous $6800 support level with huge volume this will be a strong indication of the bulls finally taking control. Alternatively, another bearish reversal from here would almost certainly lead to prices falling to the $4800 major support area, as it would be second confirmation that buyers aren’t ready to risk investing at these prices. As always, when market sentiment drastically shifts, the alts tend to move quickly and certain names have seen some nice gains over the past 24 hours. Picking coins which are due for a strong reversal in situations like this is a great strategy to maximise profits. After taking a hit like most other alts in the last week, VeChain (VEN) appears to be a key contender for a substantial reversal if market conditions remain favourable. On the 1-hour chart, VEN had been forming a inverse head and shoulder pattern since the near-term low of BTC. This pattern has recently broken out with relatively strong volume and a positive crossover of the key 10 EMA and 30 EMA indicators. The RSI is showing a bounce from extreme oversold conditions with a slight bullish divergence. On the 4-hour chart the 10 EMA is now acting as support. The first level of resistance will be the 0.00045 Satoshi level, a break through here would be bullish and likely lead to prices testing the 0.0005 Satoshi major resistance level and psychological barrier. A cross of the 10 EMA and 30 EMA on the 4-hour could be an early entry point for those who believe in the project long term. Alternatively, for the more cautious investor, quite advisable in these uncertain markets, a bullish daily engulfing candle would be final confirmation. As always, use a tight stop loss to ensure profits are maintained when market sentiment is unsure. Like most other alts within the market VEN has seen a significant decline over the last month, although with the release of their platform mainnet on the 30th of June and strong partnerships in China VEN is certainly not one to miss at these low prices. Be sure to add Vechain to your watchlist.

Source: TradingView