VeChain’s price is currently sitting within a demand zone of $0.044-$0.039 – the same area which had triggered a massive rally in March. However, damp social volumes and Bitcoin’s lackluster movement were expected to keep investors cautious and avoid any trend-defying rallies until the broader market recovers.
A weekend correction following Bitcoin’s move to $38K created panic among investors as most large-mid caps lost value and closed April on a sour note. As a result, the price sat within a demand zone – an area which has previously led to a 100% rally between 10-31 March. With the RSI in oversold territory, a bullish rebound was not a completely farfetched idea.
However, before giving any more legs to a potential VeChain spike, a few internals needed to be gauged as well. One such internal is developmental activity. Back in March, network updates had a positive impact on VET and lent a helping hand to its price. Should investors choose to buy VET within its current demand zone, rising development activity could help reinforce positive price action.
On the downside, volumes play a more vital role in rallies and unfortunately, there wasn’t much interest for VET at the moment. Before VET’s March climb, social media volumes had ticked up in brief periods as VET made rounds on social media platforms and created FOMO among participants. This time around, VET was nowhere close to the spotlight and was being dominated by other alts for social volumes.
Externals present downside
Looking outside individual price performances, VET’s price was dependent on broader market cues as well. Its 30-day correlation with Bitcoin stood at 0.82, meaning that VET was more likely to follow Bitcoin than make any trend-defying moves.
Unlike in March when VeChain had the comfort of a rising Bitcoin, the situation was different this around. Bitcoin’s price had closed below its monthly 20-SMA (not shown) and many analysts expect its price to fall to $36K over the next few weeks.
Conclusion
Even though VeChain’s price traded in the same region that led to a 100% rally in March, a repeat was unlikely for the moment. Broader market conditions were not favorable and a rising development score was not enough to support a bullish outlook just yet. All in all, VET investors may have to wait for a Bitcoin recovery to reap the most out of their tokens.