VeChain scores new partnership while VET tumbles
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...
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.
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.
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.
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, 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.
Chart by CryptoCompare