The VeChain (VET/USD) price retreated on Friday as investors waited for the US personal consumption expenditure (PCE) data from the United States. VET dropped to $0.1065, which was 26% below the weekly high of $0.1410.
VeChain is a fast-growing enterprise-focused blockchain network that was started in 2015. The network migrated from Ethereum’s blockchain in 2018 and is now the biggest platform on the VeChainThor platform. VET is the native token that powers this network while VTHO is the token that powers the gas costs in the VeChainThor platform.
In the past few years, VeChain has become one of the biggest blockchain projects in the world. Indeed, the total VET in circulation is worth more than $6.9 billion, making it the 21st biggest cryptocurrency in the world. The VET price has jumped by more than 2,000% in the past 12 months and by 500% this year.
This growth was mostly because of the overall performance of Bitcoin and altcoins in the past 12 months. Analysts believe that the Fed policies of low-interest rates and unlimited quantitative easing have helped raise prices of riskier assets.
The VeChain price has also risen because of the significant activity in the VeChainThor platform. In the past few years, many large Chinese companies like Walmart China, Haier, BYD, and LVMH have embraced the platform. Other firms like PricewaterhouseCoopers and Salesforce are evaluating it.
VeChain dropped sharply last week as concerns of high interest rates in the United States and regulations in China pushed investors away from cryptocurrencies. Its price dropped to $0.06585, which was 76% below its all-time high.
This week, the price bounced back as investors rushed to buy the dip. The dovish comments by Fed’s Randal Quarles also helped pushed its price higher.
On Friday, the price declined on profit-taking and as investors waited for the latest US PCE data. Economists expect the data to show that the PCE increased by more than 3% in April while core PCE rose by 2.9%. This is a closely watched number because it is the Fed’s most favourite gauges of inflation.
VeChain price analysis
VeChain price chart
The two-hour chart shows that the VET price bounced back to $0.1405 this week. This was a notable price since it was slightly above the 38.2% Fibonacci retracement level. Along the way, the price formed what seems to be an inverted head and shoulders pattern. Indeed, the current drop seems to be part of the right shoulder.
In price action analysis, an inverted head and shoulder is usually a bullish signal. Therefore, the price will likely bounce back as investors target the 50% retracement level at $0.1578. However, a drop below $0.9037 will invalidate this prediction.