VeChain scores new partnership while VET tumbles

VeChain scores new partnership while VET tumbles

Disclaimer: This article contains technical analysis, which is a methodology for forecasting the direction of prices through the study of past market data, primarily price and volume. The content presented in this article is the opinion of the author. None of the information you read on CryptoSlate should be taken as investment advice. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own diligence and consult with a financial advisor before making any investment decisions.

VeChain is seizing the opportunities presented in China after President Xi Jinping vowed to put the nation at the forefront of blockchain technology. The firm recently scored a partnership to accelerate the development of the tea industry in one of the most populous provinces in the country. Meanwhile, VET is trending downward.

Leveraging the VeChain Thor blockchain technology

In a blog post, the VeChain Foundation announced a partnership with the Anhui Tea Industry Association to improve the production and distribution of tea in Anhui, China, through the use of blockchain technology. The collaboration comes in response to the Chinese government’s mandate to expand the use of this technology to alleviate the high poverty rates across the nation.

According to the Foundation:

“The tea industry is undoubtedly set on the fronts of poverty alleviation in the [Anhui Province], as many locals are engaged in the tea trade, often from the lower ends of the income bracket.”

By leveraging the VeChain Thor blockchain technology, tea producers and stakeholders will be able to verify and certify information about the full lifecycle of different products. This will boost productivity and efficiency throughout all stages of production in the supply chain. Subsequently, fortifying the presence of the Chinese tea industry across international markets.

The VeChain Foundation highlighted that the gross value of the tea industry in Anhui is estimated to reach $7.1 billion by 2020. As a result, the VeChain Thor blockchain technology could potentially be implemented by the 670 enterprises and 194 business owners that are part of the Anhui Tea Industry Association.

Despite the significant strides that the Foundation is making to expand the utility of VET, the price of this cryptocurrency crashed over the past few weeks. And, several technical indicators estimate that the bearish momentum will continue.

VET technical analysis

On Dec. 12, a death cross formed on VET’s 1-day chart. Since then, VeChain plummeted over 30 percent to recently hit a low of $0.00455.

This technical pattern developed when the 7-day moving average crossed below the 30 and the 50-day moving average. Death crosses are indicative of trend changes from bullish to bearish and estimate further declines.

VET US dollar price chart
VET/USD by TradingView

Despite the bearish outlook, the TD sequential indicator is presenting a buy signal in the form of a red nine. This technical index estimates a one to four candlestick correction to the upside.

A green two candlestick trading above a preceding green one candle will confirm the bullish signal. But, it could be invalidated the moment a red two candlestick trades below a previous red one candle.

VET US dollar price chart
VET/USD by TradingView

Based on the Fibonacci retracement indicator, it is very likely that the buy signal will be invalidated. At the moment, VET is trading below the 61.8 and 65 Fib, signaling a further correction. An increase in the selling pressure would take it to test the next level of support given by the 78.6 Fib level at $0.00397.

Nonetheless, a spike in demand for VeChain could trigger a bullish impulse. If this crypto is able to close above the 61.8 Fib, it could try to test the next level of resistance around the 50 Fib, at $0.00547.

VET US dollar price chart
VET/USD by TradingView

Moving forward

The VeChain Foundation is systematically expanding the utility of VET. As China embraces blockchain technology, the Foundation is tapping on a wide range of industries. From a drug and vaccine traceability platform to a cross-continental logistics and trades solution, VeChain is trying to meet China’s demand. Although technically the price of VET looks weak, fundamentally, the future seems bright.

VeChain

18 Dec at 10:23 am UTC

$0.00

-7.17%

VeChain, currently ranked #30 by market cap, is down 7.17% over the past 24 hours. VET has a market cap of $257.45M with a 24 hour volume of $62.97M.

VeChain Price Chart

VETUSD Chart by TradingView

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