VeChain sees a breakout: Will VET hit $0.05 soon?

• VeChain’s breakout above the descending channel positions it for a potential rally toward $0.05.
• Market activity suggested cautious optimism despite declining social dominance.

VeChain [VET] recently broke out of its multi-year descending channel, generating renewed bullish optimism and attracting significant attention.

However, at press time, VET was trading at $0.03254, reflecting a 0.82% decline over the last 24 hours.

The token has dropped from $0.035 in recent days, and social dominance has decreased from 0.242% of the previous day to 0.181%. Despite these declines, can VET sustain its breakout and move toward $0.05?

2 factors hint at a bullish continuation

VET’s breakout positioned it close to the key $0.035 resistance level. A strong daily close above this level could pave the way for a rally to $0.05, a major target supported by the 4.236 Fibonacci extension level.

However, the Fibonacci retracement also highlighted $0.0319 as an important support zone if prices consolidate.

On the daily chart, the Relative Strength Index (RSI) sat at 64.8 at press time. While this meant that momentum was still bullish, it also signaled a cautious approach as VET neared overbought territory.

Therefore, if buying activity strengthens, the price could break above resistance levels and continue its upward movement.

Source: TradingView

Social dominance reflects mixed sentiment

Social dominance for VET has declined from 0.242% the previous day to its press time level of 0.181%.

This significant drop shows reduced discussions around VET on social platforms, which could slow speculative interest.

Consequently, higher engagement and renewed social activity are needed to maintain the momentum and attract more traders into the market.

Source: Santiment

Liquidation data reveals potential volatility

Liquidation metrics show that $41.5K worth of long positions have been liquidated, compared to just $5.96K in shorts.

This imbalance suggests that bullish traders still dominate, but it also highlights the potential for volatility. If long liquidations increase further, this could negatively impact VET’s ability to sustain its current levels.

Source: Coinglass

Open Interest points to increasing confidence

Open Interest for VET has risen by 0.69%, reaching $48.94 million. This steady increase indicated growing trader confidence and market activity around VET.

While rising Open Interest often supports sustained price movements, it may also lead to heightened price volatility, especially as VET approaches critical resistance levels.

Source: Coinglass

Will VET hold its breakout?

VeChain’s breakout from the descending channel has positioned it for a potential rally toward $0.05.

Read VeChain’s [VET] Price Prediction 2024-25

However, the decline from $0.035 and reduced social dominance suggested challenges in sustaining momentum.

If VET closes above $0.035 with renewed volume and engagement, a rally to $0.05 is likely. Failing to hold current levels, however, could lead to short-term consolidation. For now, the bias remains cautiously bullish.