The VeChain price is struggling to find direction as the rest of the crypto industry remains muted. The VET is trading at $0.1285, where it has been in the past few trading sessions, bringing its total market capitalization to more than $8.4 billion, making it the 20th biggest cryptocurrency in the world.
What happened: The price action of VeChain provides further evidence of the close correlation that exists among cryptocurrencies. In most cases, a rise of Bitcoin price is usually accompanied by the rally of other digital currencies like Cardano and VeChain.
Therefore, the ongoing consolidation in VeChain is mostly because of the ongoing price action in Bitcoin. As such, the key catalyst for BTC and other cryptocurrencies is the upcoming US inflation numbers that will come out later this week. The data is expected to show that the US inflation continued to rise in May as the country continued to recover.
These numbers are important because of their ability to influence interest rates. If the US inflation keeps rising, there is a possibility that the Federal Reserve will be forced to intervene and hike interest rates. In theory, higher interest rates will be negative for VeChain and other cryptocurrencies since they will push investors to other high-yielding assets. So, what next for the VET price?
In an earlier note, I wrote that the Dogecoin price was likely experiencing a calm before the storm moment since its volatility has dropped sharply. The same can be said about VeChain, whose price has not made any significant moves lately.
A look at the four-hour chart shows that the cryptocurrency has formed an ascending channel that is shown in red. The price is slightly above the lower side of this channel. It has also moved slightly above the 25-day moving average and is slightly above the 23.6% retracement level. The coin also seems to be forming a head and shoulders pattern.
Therefore, in my view, we can’t rule out a situation where the coin makes a deep decline in the near term. This will be confirmed if the price manages to move below the lower line of the ascending channel that is shown in red. The alternate scenario is where the price moves up to retest the upper side of the channel at $0.1530.
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