Mid May Update: Technicals
VeChain has been underperforming lately, especially if we juxtapose its performance with some of its nearby coins on the market rankings. It did have its own mini bull run last week, but the correction phase has prolonged its duration to the great sorrow of VET holders.
The 4h chart indicates that VET surged all the way up to the resistance (former support) at 107 sats and failed to break it on the first and second attempt. It is right now hovering between 2 Fib levels and between EMA20 and MA50. The Fib50 line of 95 sats is the breakdown level for VET – if it fails to hold it, a stoop to the local bottom of 80 sats in play.
Breakout point for VET is the 110 sats zone, a most recent high for VET, that needs to be smashed, by closing a daily candle above it, before testing the 123 and possibly 150 sats level. Entering VET right now is a good risk/reward decision only with accompanying tight stop loss right below the breakdown level.
VETBTC on the daily might be forming a bullish pennant pattern, which would indicate a further continuation of the underlying minor trend, which is bullish. Should this pattern play out as in most cases, VET could see a mini rally from this Fib236 at 99 to the Fib50 that is around 120 sats.
VET is one of the coins which daily trading volume is least manipulated in the market, as the “Real 10” (volumes on 10 legit, non-manipulating exchanges) metric by Messari shows it to be $7.4 million in the last 24 hours, while the reported volume by exchanges is $18.1 million. That is “only” 2.4x overstated volume which is a great ratio since majority of the market is in double digits on this overstatement metric.
Overall, technicals and fundamentals seem to trend in the right direction for VET even though the market has yet to recognize and reflect that in VET’s price. Price action is somewhat disappointing for the holders as VET is up 3% in USD and down 27% to BTC in the last 7 days.
Moreover, VET has a somewhat strong buy support, according to coinmarketbook.cc. Buy support is measuring sum of buy orders at 10% distance from the highest bid price. This way we can eliminate fake buy walls and whale manipulation and see the real interest of the market in a certain coin. VET currently has a $1.1m of buy orders measured with this method, which sets VET buy support/market cap ratio at 0.33%, a wide-market below average value. Bitcoin and Ethereum have a 0.27% and 0.28% ratios, respectively. This novel metric indicates there are a lot of manipulations, inflated liquidity and fake orders on all crypto trading pairs, including VET pairs.
Vechain’s sentiment score, measured by the market analytics firm Predicoin, paints a neutral picture.
Predicoin wraps its analysis up into
a single simple indicator known as the SentScore, which is formed from the
combination of five different verticals: news, social media, buzz, technical analysis
Vechain currently has a Sentscore of 4.0 which is defined as “the neutral zone”. You can see that Reddit buzz has increased in the last 30 days with Twitter and search volume flatlining and decreasing slightly. Sentscore is also pretty much on the same level for the whole last 30 days.
Overall, Predicoin’s Sentscore is an excellent indicator of community interest and can provide useful insight into which coins are trending right now.
Mid May Update: Fundamentals
To assess fundamental health of a project, we used the FCAS metric. FCAS is a comparative metric whose score is derived from the interactivity between primary project lifecycle fundamentals: User Activity, Developer Behavior, and Market Maturity.
There are a few sub components which provide data to each fundamental:
User Activity is comprised of Project Utilization and Network Activity
Developer Behavior is comprised of Code Changes, Code Improvement and Community Involvement
Market Maturity is comprised of Liquidity and Market Risk. Market Maturity has less than 5% impact on a project’s overall FCAS.
FCAS ratings are on a 0-1000 point scale with a corresponding letter grade. Break points are based on standard deviations in the underlying component distributions.
900 – 1000 is marked as S for superb. 750 – 899 is marked as A for attractive. 650 – 749 is marked as B for basic. 500 – 649 is marked as C for caution. And finally, below 500 is marked as fragile. You can read more about it here.
Vechain has been ranked as the B category – basic with overall 736 points as of May 7th. By far the strongest metric that contributed to this great score is developer activity that got 790 points, followed by user activity with 687 and market maturity that had 627 points.
Below are some of the most important news
around the project in the last 30 days.
- On April 27th, a new smart contract was pumping huge amounts of transactions to the VeChain blockchain resulting in record number of transactions on VeChain, beating even bitcoin in overall transaction number for the first time in VET history. Presumably a migration of Deloitte certificates switching from ETH to VET or the first milk product transactions by Bright Code were the reason for the increased number of transactions.
- Professional services firm Deloitte will develop solutions on the VeChainThor network, having decided to migrate from the Ethereum network. Deloitte is one of the “Big Four” professional services firms, and fellow Big Four member Pricewaterhouse Coopers is also working with VeChain towards blockchain solutions.
- Vechain has showcased the next step in their partnership with automobile manufacturing giant BMW – a new service called VerifyCar on the VeChainThor Network.
- The VerifyCar application addresses the issue of mileage fraud, which according to the presentation is present in one-third of vehicles in Germany. VerifyCar is a digital passport that allows users to monitor their odometer and maintenance history.
- They have also revealed that professional services firm Deloitte will develop solutions on the VeChainThor network, having decided to migrate from the Ethereum network.
- Another announcement from April is the new solution called ToolChain that grants users with limited technical knowledge the ability to create solutions for themselves or their business on the VeChainThor blockchain – all within 30 seconds according to the official statement.
Below is our long-term forecast where we cover general market movements and sentiment shifts before delving deeper into the specific predictions for VET.
VeChain is Asia-based project that is expanding its IoT and supply chain focused platform through the creation of the VeChain Thor network.
VeChain Thor’s goal is to be an enterprise geared blockchain ecosystem focused on governance and ease of use. The project plans to operate a native blockchain that will enable businesses to easily use various smart contract applications. VeChain focuses primarily on exchanging and storing data through the blockchain and has run live applications in the supply chain space.
Year in Review
According to the company, 2018 was a phenomenal year for them despite the crypto market condition. Since it launched mainnet, it has enjoyed continuous growth in the number of transactions, mainly due to third party developers on its VeChainThor blockchain and the rise of enterprise adoption.
They said they had witnessed a growth of mainnet transactions and due to increased enterprise adoption and third-party developers on their VeChainThor blockchain.
In April, VeChain introduced their MPP concept while in May their alpha testnet went live. They also announced partnership with Shanghai eGrid Consulting and Inpi Asia. In May they entered into collaboration with PwC Hong Kong and PwC Shanghai and DNV GL, which is one of the most fruitful partnerships they concluded to date. Almost every month of the year had one or two similar business cooperation deals announced, with companies predominantly from Asia.
Their mainnet was launched in June followed with a slew of upgrades and features geared at bootstraping their developers pool and ecosystem. In July their released their mobile wallet, which got updated several times during the year. Most significant change was the token swap where the 1 old token got you 100 new tokens and it also saw it renamed from VEN to VET.
At the end of the year, Comet went live – Comet is the MetaMask of Vechain – the most important window into the VeChain ecosystem. It will enable developers and users to communicate with the VET blockchain via Web3 framework and Connex, a Vechain developed Web3 alternative.
As for the launched projects on VeChain’s blockchain, some of the most notable ones are Plair, DecentBet, Totient, OceanEx, Safe Haven and many more.
VeChain (VET) Roadmap for 2019
There is no official roadmap for VeChain, the only info you can find on their website is that 2019 is reserved for “VeChain Ecosystem Expansion”.
The Foundation wrote that its mission in the New Year is to “grow the transactions with business value and build infrastructure services around the VeChainThor blockchain to facilitate mass adoption.”
VeChain will be focusing on enterprise applications and dApps for real-world business activities.
The Foundation intends to provide SDKs, developer documentation, tools and smart contract templates along with turnkey package templates.
These could be directed towards tokenized asset issuance, digital asset management wallets, and data storage.
It will also work towards expanding its partner network and help them become experts in VeChain technology.
General Market Movements and Sentiment Shift
The downfall of altcoins that were mainstream media darlings at the start of the year, VET among them, can be attributed, in part, to novice investors getting scared off once the bear market kicked in with a vengeance. Every resurgence of bitcoin in recent period, was met with the, for the most part, inability of altcoins to rally with it. Reason for that can be rookie investors learning from their mistakes, while smart money that was previously watching from the sidelines has begun to enter into bitcoin.
These entities weren’t about to buy BTC when it was trading at an all-time high, but they’ll take a look now, having missed the boat the first time around. None of them, it seems, are interested in altcoins however, despite the fact that many are trading at a 5x discount. Institutional investors may be cautious, but they’re not foolish.
How to evaluate fundamentals of a crypto project
We should consider crypto valuations like educated gambling, a ‘prediction market’ where we are betting on the odds of project and token success. There are some catalysts of success we can identify:
- Project success drivers (user traction, strong financial bottomline, good treasury management, network effects/synergies between users and token investors)
Real user traction is the most important driver of success, that is what most of holders call “adoption”. If people start using certain crypto project because they find it useful and it makes their life easier, that is a guarantee of success. So far, almost no crypto project can claim to have done so.
Strong financial warchest that will enable teams behind the project to develop their visions, incentivize other developers to join them and start using their product is also a crucial aspect of any project. Tied into it is treasury management – especially for the project that had big ICO proceeds. Temptation to squander all those millions into “conferences and events” (read hard-core partying on yachts and luxury hotels) was massive, especially if we consider that majority of token projects founders were no-names and ordinary employees that worked for a paycheck before the ICO fairy-tale happened to them.
Another adoption indicator – network effects, where every additional user of a good or service adds to the value of that product to others. When a network effect is present, the value of a product or service increases according to the number of others using it.
If you can objectively notice that your favorite token project has some of these traits happening for it, be happy – you might have found a winner.
- Token success drivers (favourable demand-supply dynamics, programmable incentives on token, aligned incentives with management team and consensus on token as common unit of value creation).
Token success is completely dependent on tokenomics. As defined by infloat.co, tokenomics involves the incentivization of certain stakeholders to ensure particular behavior.
So, tokenomics is essentially an incentive structure designed to ensure that a token has a purpose and utility within its native network. It is the study of how coins/tokens work within the broader ecosystem that can be considered as a sovereign micro-economy. This includes such things like token distribution as well as how they can be used to incentivize positive behaviour in the network.
For example, bitcoin is designed to ensure that bitcoin miners have a reason to mine new bitcoin. Miners validate bitcoin transactions and receive (or create) newly minted bitcoin in the process.
On the other hand, individuals, businesses and other bitcoin users pay a transaction fee for miners to include their transaction in the next block. This ensures that even when all bitcoin have been minted (to the tune of 21 million, which should happen in around 2140), bitcoin miners are still incentivized to keep ‘mining’ (i.e. validating transactions).
To paraphrase all of the above in the simplest terms: if you, after weeks of research and reading, can’t figure out why the project needs to have a token, it probably doesn’t.
So why does the token exist then?
– To make the project founders rich.
But there are some people on Twitter, Reddit, Telegram claiming otherwise.
-Yes, they are either: paid to do so by those same founders, they are desperate and delusional bad holders or they are just stroking their own ego with newly learned fancy economic terms and jargon.
Needless to say – stay clear of such projects.
Our VET Price Prediction for 2019
VET, as the rest of the market, is tied at the hip of bitcoin’s price action. If bitcoin embarks on another bull run, VET can hope for one as well. Since that is very unlikely, don’t expect much to change for VET price-wise in this year. So 2019 will be a year of boring sideways action with minor bitcoin ignited jumps and slumps.
The main currency in cryptocurrency markets is Bitcoin and given this, altcoins tend to fuel Bitcoin runs and Bitcoin tends to do the same in return. Given this relationship, Bitcoin price movements (or lack thereof) tend to effect altcoin prices.
When Bitcoin goes up swiftly, it will likely:
- Suppress or depress altcoins as money flows into Bitcoin;
- Or, take altcoins along for the ride
In cases when Bitcoin plunges, it will likely:
- Depress altcoins as money flows into fiat;
- Or, cause altcoins to boom as money flows into them, but this is rarely the case.
When Bitcoin moves sideways, it will likely:
- Cause altcoins to mimic that as traders wait for a clear sign on the direction of the market;
- Or, cause altcoins to flourish as traders look for returns in altcoins and try to get favorable trades in terms of BTC pairs.
To summarize, Bitcoin is the focal point of the crypto market in many ways, and with BTC trading pairs on every exchange, the gravity of Bitcoin is hard to evade.
VET-BTC Price Correlation
The vast majority of trading that occurs in the crypto markets are between BTC and altcoin trading pairs. Since most altcoins do not pair with fiat currencies (and only a few are paired with stable coins like USTD), Bitcoin is the next best option. Therefore, when Bitcoin is stable, it forms as the ideal base currency for buying altcoins (which is why altcoins tend to do well when Bitcoin goes sideways).
Correlation is measured on a scale from -1 to 1. Values above 0 shows the degree to which altcoin is moving in the same direction as BTC prices (either up or down in tandem), and values below 0 shows the degree to which altcoin moves in the opposite direction of BTC prices (so when BTC goes down, altcoin goes up, or vice versa). Values around 0 shows that when BTC price moves, altcoins stays steady, or alternatively that when altcoin moves up or down that the BTC price is staying steady.
Based on the correlation analysis, BTC and VET have a negligible relationship in the last 100 days. The correlation coefficient of their prices is 0.11, which was calculated based on the previous 100-days’ price dynamics of both currencies.
The majority of projects will fail — some startups are created just to gather funds and disappear, some would not handle the competition, but most are just ideas that look good on paper, but in reality, are useless for the market.
Vitalik Buterin, co-founder of Ethereum said:
“There are some good ideas, there are a lot of very bad ideas, and there are a lot of very, very bad ideas, and quite a few scams as well”
As a result, over 95% of successful ICOs and cryptocurrency projects will fail and their investors will lose money. The other 5% of projects will become the new Apple, Google or Alibaba in the cryptoindustry. Will VET be among those 5%?
Good probability of that happening.
First and foremost, VeChain has built a broad and ardent community that is more educated and patient than most of other “get rich quick” altcoin’s communities where holders only discuss price in a hostile and ill-bred manner.
The Vechain Foundation is very balanced in their approach to the 3 most important dimensions of every crypto project: technology development, forging business partnerships and community fostering.
VET has a chance to be one of the first broadly used blockchains in one of the most realistic use cases for a decentralized ledger: supply chain management. All of this instills holders with justified hope that their token is worth holding through the bear dominated times.
All of this summed up means one thing: VET might live through couple of orchestrated and, for a regular trader, completely unpredictable pumps but the majority of time will be murky sideways trading with small volume and no significant interest from the market.
Price will heavily depend on what BTC will do and since many analysts think BTC will not be making big moves in this year, it is hard to expect VET will do them either. The price will probably stagnate and record slow-moving depreciation or appreciation depending on the team activity, potential technological breakthrough or high-level partnership.
Market prediction for VeChainprice 2019
With the market being completely unpredictable, forecasting the cryptocurrency price is really more of a gamble and luck rather than a data driven guesstimate.
Let’s throw a glance at the eminent publications and personalities, and their predictions regarding the VeChain (VET) price, which will give us another point of view to consider:
Walletinvestor is a popular website that does technical analysis-based price predictions of various cryptocurrencies. According to them, VeChain is expected to go down to $0.000001 in one year. This price prediction is very bearish pessimistic and it might not fall that much.
Trading Beasts also gave a very neutral prediction saying that by 2019 end, VeChain might be in between $0.01 to $0.02, which is a wide range, so this prediction is given neutrally, without a showcase of any optimism.
Mega Crypto Price
Mega Crypto price predicts that VeChain might reach $0.258 by the end of 2021 and $0.612 by the end of 2023. (VeChain Forecast)
Smartereum is a site that regularly publishes cryptocurrency predictions. They believe that the price of VeChain could go up as high as $75 by the end of 2023.
Cryptoground predicts that VeChain might reach $2.58 by the end of 2019. They even added their version of VeChain (VET) price prediction 2020, where they stated that VET might reach $4.10 by 2020.
VeChain (VET) Future: 2020, 2023, 2025
Having a first mover advantage in one of the most reasonable applications of blockchain – supply chain management, VET is positioned optimally to make a leap into the top 10 cryptocurrencies by 2020. With a potential bitcoin-induced bull run, reaching $.10 is achievable.
If VET maintains its relevance in the industry and manages to stay ahead of their competition, it might be worth 10-100x than its hitherto all time high.
Again, If VET maintains its relevance in the industry and manages to stay ahead of their competition, it will surely be 100x+ more worth than now.
Predicting prices of novel, highly volatile and risky asset classes is a thankless task – best answer is no one knows. Educated guess is that realistic VET price for the foreseeable future is somewhere between its current price and its all time high.
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CaptainAltcoin’s writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner.
The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com