VeChain (VET) has experienced a strong rally recently, with its price increasing by over 27% in the past week. This price surge comes amid a broader bullish market sentiment, although VeChain still faces challenges due to past losses in market share. Despite these hurdles, VET is now poised for what could be a significant breakout, as it approaches key resistance levels. Let’s take a closer look at the factors driving VeChain’s rally and why a double breakout could be on the horizon.

VeChain’s Recent Surge and Technical Patterns

VeChain’s recent performance has been impressive, especially over the past few days. The token surged by more than 9% in the last 24 hours, pushing it to trade at around $0.03267. The 27% rise in the past week has been driven by a breakout from a falling wedge pattern, a bullish chart formation that typically signals an upward trend when the price breaks above the upper boundary.

According to crypto analyst World Of Charts, this breakout marks a key milestone for VeChain, which has been consolidating within a triangle pattern since 2020. The breakout from this pattern is significant because it suggests that VeChain is poised to break above both horizontal and diagonal resistance levels, signaling the potential for continued upward momentum.

If VeChain can sustain this bullish trend, it could be on track to retest its 2024 high before the year ends. Such a rally would likely coincide with an altcoin season, where broader market sentiment pushes altcoins to outperform Bitcoin.

Challenges Ahead: Bearish Signals Emerge

Despite the optimistic price action, there are a few concerns that could delay VeChain’s potential breakout. One major red flag is the decline in trading volume, which fell by 44% in the past 24 hours despite the price increase. A drop in volume can indicate a lack of conviction in the rally, making it vulnerable to a reversal or consolidation.

Additionally, VeChain’s Open Interest (OI) has risen sharply, signaling strong investor confidence. However, this sharp increase could also suggest that the market might be overheating. If the momentum slows, a drop in OI could lead to a cooling-off period, potentially causing the price to retract.

Another cautionary sign is VeChain’s Fear and Greed Index, which has entered the “extreme greed” phase. Historically, when this metric reaches such elevated levels, it often precedes a price correction, as investors start to take profits. Additionally, the Relative Strength Index (RSI) for VeChain is nearing the overbought zone, further signaling that a pullback could be imminent.

Key Price Levels to Watch: Potential for Pullback

Given the current market conditions, investors should be prepared for possible pullbacks. A price correction could occur within the $0.028-$0.026 range, which would likely serve as a support zone. This retracement would allow VeChain to consolidate before attempting another breakout above key resistance levels.

Despite these potential challenges, the MA Cross indicators suggest that the overall trend remains bullish. The 9-day moving average is currently above the 21-day moving average, a positive signal indicating that the market is still tilted in favor of the bulls.

What’s Next for VeChain (VET)?

VeChain’s recent rally has brought renewed optimism to the asset, and its breakout from a multi-year consolidation pattern has captured the attention of traders. The possibility of a double breakout — above both horizontal and diagonal resistance levels — could fuel a significant rally, with a retest of its 2024 high within reach.

However, the path forward is not without risks. The decline in trading volume, the high Fear and Greed Index, and the overbought RSI all point to potential short-term volatility. Traders and investors should remain vigilant, monitoring for any signs of price retracement within the critical support range.

Ultimately, if VeChain can sustain its upward momentum and break through its key resistance levels, it could be on the verge of a major rally. The coming days will be crucial in determining whether VET can maintain its bullish trend or face a temporary pullback before another surge.