VeChain upgraded its consensus mechanism from PoA to DPoS, but the price of VET continues to plummet.

VeChain (VET) is currently trading at 0.0156 USD at the time of writing this article on Friday, amid strong fluctuations in the crypto market. A prevailing cautious sentiment has led many investors to temporarily withdraw over the past few weeks, primarily due to macroeconomic uncertainties and the absence of clear price-driving factors.

VeChain transitions mainnet from PoA to DPoS

VeChain has just announced its plan to transition the mainnet from the Proof of Authority (PoA) mechanism to DeleGated Proof of Stake (DPoS), opening a promising new chapter for the development of the network.

This upgrade will be implemented in the upcoming Hayabusa update. Previously, with the PoA mechanism, VeChain centralized control of the network, but now the goal is to empower more VET token holders.

According to VeChain: “This important update will drive the next growth phase of the network while maintaining the predicted costs and the key features that users rely on.”

With DPoS, all VET holders can participate in staking and delegate to validators, while enhancing both security and decentralization without impacting the predicted costs – a key factor in maintaining a stable user experience.

VeChain emphasizes that the reason for transitioning to DPoS is to provide enterprise utility with 100% uptime, while ensuring that all VET holders can participate in the network without increasing complexity.

On X, VeChain explained: “Token holders will directly participate in securing and receiving rewards, while node operators compete based on performance and reputation. Businesses and developers still benefit from predictable costs, making consumer-level user experience feasible and sustainable.”

Technical Analysis: VeChain Faces 15% Downside Risk

VeChain is trading around the 0.0150 USD mark at the time of writing this article on Friday, reflecting the prevailing gloomy sentiment in the crypto market. Currently, this token is below several important moving averages, including the 50-day EMA at 0.0182 USD, the 100-day EMA at 0.0203 USD, and the 200-day EMA at 0.02289 USD, indicating that the bearish pressure is quite strong.

VET/USDT daily chart | Source: TradingViewThe relative strength index (RSI) on the daily timeframe is at 41 and heading down towards the oversold zone, warning that bearish momentum is increasing.

Traders need to pay attention to the sell signal from the MACD indicator: if the MACD line (green) crosses below the signal line (red), this could be a signal to reduce positions, increasing selling pressure in the crypto market.

In the scenario of a continued downward trend, VET could plunge about 15%, down to the level of 0.0132 USD. Conversely, if the bulls successfully defend the short-term support level at 0.0150 USD, a short-term rebound could very well occur.

SN_Nour