Crypto analyst Ali Martinez has identified a technical indicator suggesting a significant upswing for VeChain (VET). This indicator, a recurring fractal pattern on the 1-month chart, has historically preceded substantial price increases for VET.
While VeChain has experienced a decline in recent weeks, currently trading at $0.0359, the long-term outlook appears bullish. This is especially intriguing considering VET’s over 80% drop from its all-time high of $0.2798.
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Fractal Patterns Signal Bullish Rebound
The crux of Martinez’s analysis hinges on the presence of fractal patterns on the VeChain monthly chart. Fractals are geometric shapes that exhibit self-similarity, meaning their smaller parts resemble the whole. In the context of technical analysis, these patterns can sometimes indicate repeating price movements.
Historical data reveals a similar fractal pattern preceding a significant price rally in 2020. During the bear market of late 2018, VET endured five consecutive months of decline. However, a fractal pattern emerged in November 2018, persisting for 19 months. This period witnessed intermittent price fluctuations before a breakout in July 2020.
This breakout ushered in a period of substantial growth for VET, coinciding with the broader 2021 bull run. The price eventually surged to its all-time high of $0.2664 in April 2021, representing a remarkable 2,907% increase in just nine months.
Interestingly, a comparable fractal pattern materialized in June 2022, following a 31% price drop for VET. This pattern also spanned 19 months, culminating in a 69% monthly gain for VET in February 2024.
Analyst Projects Price Target of $0.60
Based on the historical correlation between the fractal pattern and subsequent price rallies, Martinez anticipates a similar upswing for VET in the coming months. His analysis, incorporating the identified chart pattern, projects a price target of $0.60 for VET. This translates to a potential increase of over 1,565% from the current price.
Supporting Indicators Bolster Bullish Outlook
Several additional factors bolster the bullish sentiment surrounding VeChain. Firstly, on-chain data from Coinglass indicates a sustained trend of VET withdrawals from exchanges. This trend typically signifies reduced selling pressure, as investors move their holdings to private wallets, potentially with a long-term view.
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Secondly, rising bullish sentiment is reflected in the increasing Open Interest (OI) for VET futures and derivatives contracts. Furthermore, the long/short ratio has climbed to 1.02 within the same period, suggesting a dominance of optimistic positions among market participants.
While past performance does not indicate future results, the emergence of a recurring fractal pattern on the VeChain monthly chart presents an intriguing possibility for investors.
The confluence of on-chain data and rising bullish sentiment further strengthens the case for a potential price surge in the foreseeable future. However, as with any investment, conducting thorough research and maintaining a risk management strategy is crucial.
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