The VeChain AI Revolution - VET Crypto Analysis

[00:00:00]Opportunity is found where nobody is looking. And yes, Vechain has been suffering in the last months as pretty much any other altcoin, but sometimes there are gems to be found. If you bought Zcash 1 year ago, for example, you'd now be up 10x. And while the project launched as a chain for supply chain management, it has now completely changed its focus. There's recently been an announcement that Vechain is developing an AI agent suite. So, is this potential opportunity? Let's have a look at the on-chain data, the data most people aren't considering. Hi, my name is Gerhart. I've been in the crypto space for the last 8 years. I had my first million 3 years ago, and I did this mainly through active altcoin trading. My track record is on the website down below. In the last 2 years, I started publishing my trades in real time. We have achieved 47% APR since then. That's the chart. Currently, we are at an all-time high if you consider the open positions. How many of those open positions do we have right now? The answer is six. But of course, those are available to the premium members.

[00:01:03]Public, we see the entire trading history. So, you can have a look at what kind of trades I do and how consistent the performance is. I don't think many people here on YouTube are willing to be that transparent. Now, here's the story around Vechain. AI agents that aren't just for trading as we had with the virtual protocol, but they actually earn for you. It's still under development, and we can request early access. But this video is about how much we could potentially gain. Now, this is the VET price in US dollars long-term. And if you work with the assumption that sometimes Vechain is cheap, sometimes it's expensive, and it just trades in a range, then getting back to that equilibrium price, the dotted line, would imply a performance of 550%.

[00:01:51]Now, how realistic is that? Because most people on YouTube, they are selling stories like this. What I think is most important, always investing, is to figure out what are the opportunity costs. So, for example, if you invest in an altcoin, we should get outperformance versus the rest of the altcoin market, and we should also get outperformance versus Bitcoin. Because in the end, we've got all of that correlation within crypto. When Bitcoin goes up, then all the altcoins go up. When Bitcoin goes down, all the altcoins go down. So, if you just want to get crypto exposure, we have to decide what are we getting exposed to within the crypto market.

[00:02:24]Because timing the general macro, we can also do that with Bitcoin. So, the US dollar chart isn't really that useful, unfortunately. We have to look at outperformance. And so, this here is Vechain versus Bitcoin. And it tells a very different story. A constant underperformance over the last 1 and 1/2 years of more than 90%.

[00:02:47]Now, there are still a few little of those rallies over here. Those go away, though, when we don't look at Vechain relative to Bitcoin, but at Vechain relative to the rest of the altcoin market. There's really no outperformance to be had here, except for those very brief short squeezes. Now, what's that over here? Why did Vechain suddenly more than double in a few days? I think the answer is a lot of people saw a chart like this, and they said, "Okay, let's bet on falling prices of Vechain." Then the market makers, or the decentralized exchanges and some hedge funds, they see all of that open interest, all those people, all the retail investors betting on falling prices, and they intentionally buy up the VET token very quickly to force liquidate all of those retail investors. Once they got liquidated, then all the spot holdings that they purchased is just getting sold off again. A classic case of a short squeeze, a short-term manipulation tactic that usually reverts within a few weeks afterwards, but it doesn't change the overall trend. Now, don't stop watching just yet because just because the Vechain underperformed doesn't mean that we cannot make any money from this, far from it. We just have to be directionally correct. The target is not necessarily to find the next Zcash. We can play the game on easy mode. We can just flip this chart. Everything that's red over here turns green and everything that's green, which isn't that much, that turns red. So, instead of buying Vechain, we could be shorting Vechain and then buying Bitcoin against that.

[00:04:22]So, that's called a relative valuation bet. That's the basis of my outperformance. That's why this chart looks the way it does. I look for weak altcoins and then bet on their further decline. At least that's currently what I'm doing in this current market phase.

[00:04:38]And so, a chart like this turns into a chart like this. And yes, short squeezes are painful, but it's about proper risk mitigation as in using stop losses, using proper bet sizing. Because that's fundamentally a problem that many people have doing setups like this. They bet too much of their portfolio on something like this without a stop loss. If you have a single trade that wipes out 50% of your entire account because you bet too much on it and you don't have a stop loss, then that's your problem, right?

[00:05:07]Then you have to double your funds again just to be back to zero. It's important to do proper risk management. It's important to have nice stop losses and don't bet your entire portfolio on something. Otherwise, your chart would look much more volatile, much more risky, not that much of a constant growth. Now, does it make sense to still bet on a further decline of Vechain and set up this trade? Maybe because here we've got the TVL, the total value locked on Vechain over time. This goes down as in the technology is not getting used. My personal impression is that Vechain is just using the current hype of the day. It did this on the very beginning when it launched, it was a supply chain blockchain because that was hype at the time. Now it's moving to artificial intelligence and to agents because that's now the story. But really, what we need to see is adoption.

[00:05:55]We don't need narratives, we need products that actually get used. And so, don't just believe the hype that you see on X. If you are using X, formerly known as Twitter, then feel free to follow this account over here. All right, so I publish various data points regularly on this channel. Make sure that you follow the right account, though. So, that's @ Bitcoin Strat. Don't follow an impersonator, don't follow a scammer.

[00:06:18]This is the only official account. Now, there's one thing speaking for Vechain, and that is there is no official token inflation. Apparently, all of the supply is already circulating. So, we don't really know what causes this long-term underperformance. Very often, the underperformance is just caused by new tokens hitting the market and then the token issuance getting sold over time.

[00:06:41]This seems to not be the case here. My best guess is that maybe many market makers and centralized exchanges bought Vechain at the hype, they held this just to earn the trading fees of Vechain, and then over time they're now just selling off their holding. But it is somewhat of a wild guess. All I can see is long-term underperformance, but I don't really know who is constantly selling here. If you do, then please comment this down below. I'd be very much interested in figuring out what's going on and how much longer this selling pressure might last because that gives us a good hint when it might make sense to set our stop losses a bit tighter. There is an interesting development with Vechain, and that is the social engagement is going up. As in, even at the height of the prior bull run in 2020, very few people were discussing Vechain, but this is now recently changing. The question is how much of those engagements are organic, or is this maybe just bots that are interacting here? Because when we look at the number of creators that talk about Vechain over time, that's still very low. And the sentiment of those social engagements is suspiciously high with 98% being bullish. Usually, this number hovers somewhere between 70 to 80%. So, the crypto market already has a positive bias, but 98% that's North Korea type of agreement values. So, let's have a look at what happens at the different markets. We've got the spot market where we just buy VET, and we've got perpetual futures market where we can bet on VET with leverage. Now, in the last 24 hours, we had 2 million worth of spot trading volume. On the perpetual futures market, we had more than that, 13 million. Both numbers are not large, but at least the perp trading volume is higher, as in we should pay some attention. What I find fascinating is that the funding rate tends to be positive most of the time for Vechain.

[00:08:35]So, on the perpetual futures market, there are more people betting on a rising price than on a falling price.

[00:08:40]That's fascinating given the long-term chart, right? Shouldn't there be more people betting on a falling VET price?

[00:08:47]It's not what we see here. And so, again, there's something going on that's very much out of the ordinary. A setup that we don't see for many altcoins.

[00:08:55]Usually, if something underperforms long-term, the funding rate would be negative. The open interest is very low, as in not many people are currently betting on Vechain, which could be interpreted as an opportunity because whenever there's more speculation on an asset, whenever open interest goes up, then also the spot price tends to follow. Open interest is just a measure of how many people bet on the price, and inherently, that also means how much leverage there currently is in the price discovery. That's currently low, so there's very little leverage. If that leverage builds up, the price would go up. The trading volume of Vechain is also rather low. Now, if you've been following this channel for a while, you know that I like to trade based on trading rules. So, So, like to run backtest simulations of buying and selling various assets. Try to find out what kind of trading rule historically worked well for Vechain in this case.

[00:09:44]And what we've got over here, that's 40,000 simulations of buying and selling Vechain. And the best combination of slow and fast-moving averages, that's over here. So, historically, that has been the 2-day with the 35-day simple moving average. Whenever the 2-day moving average went above the 35-day, we should be betting on rising prices.

[00:10:04]Whenever it fell below, we should be betting on falling prices. Where are we right now? We are below. So, this would imply Vechain is still bearish. How well does this strategy work? Here is the performance over time. So, the Vechain price is at the top, the US dollar performance is here. The blue line again the Vechain price in gray. And at the bottom, we see the value of the portfolio measured in VET. So, this is a trading rule that historically outperformed quite consistently. And the magnitude of that outperformance is also quite impressive, as in 131% annual return versus buying and holding Vechain, which gave us negative 16% per annum. So, I think it makes sense to take this signal seriously. As long as we are below the 35-day simple moving average with our 2-day SMA, but you might as well just use the price because the 2-day SMA is very close to the price. As long as we are below that longer-term SMA, we want to be cautious.

[00:11:05]At least historically, that trading rule worked exceptionally well. And so, yeah, that's in general how I trade. I like to look at trading rules that worked, and I like to bet on falling altcoins when they are particularly weak. So, for example, over here, right, Luna Classic.

[00:11:20]Every one of those trades, by the way, can be verified. When you click on those dates, you will get the according Telegram message. Now, the trading signals, they get delivered via Telegram or via email, whatever you prefer. And here, for example, we had a death cross of Luna. So, Luna Classic had the 6 and the 10-day simple moving average as best SMAs. Then, subsequently, when we got the golden cross, then we closed that position. That's how we made the particular gain here, those 14%. But, you can see not every single trade is a winner. There are losers as well. But, what matters is the very long term, right? What matters is that long term we outperform. And 47% without any leverage per annum, I think is very much respectable. And again, I don't see anybody else in YouTube that's willing to go that far, that's willing to share this data. Maybe because the data for many people doesn't look that great. So, yeah, if you're interested in manually copy trading me, if you're interested in figuring out how this all works in detail, feel free to check out the premium membership. It's currently $125 US dollars per month. There's also a 7-day money-back guarantee. So, in case you don't like premium, just email me over here, the bitcoin strategy at gmail.com, and I'll refund you, no questions asked. So, you can try it out for free. Once you join, I will send you my favorite trade. Just execute that trade, and if you use around $2,000 on that trade, you should have premium already for free. It's a very similar trade to this Bitcoin versus Vechain trade. And I will explain how to set this all up in detail in the tutorial section. So, I'll also let you know what videos to watch. There are two videos to follow. That's all that's required. So, yeah, let's be rather cautious with Vechain. It has negative momentum. It tends to long-term underperform. I don't know what the source of the selling is, but Vechain tended to underperform both Bitcoin and the general altcoin market quite consistently. There might be an opportunity for a short position, but it's important to set a very, very tight stop-loss. Again, because there can be short squeezes that are quite large in magnitude. If If got some value out of this video, and if it's your first time here, then feel free to subscribe. I publish these regularly. A like would be very much appreciated as well. It helps the channel grow. See you next time on YouTube, or see you on Premium. Link to that pops up here. Thanks for watching.

[00:13:36]Cheers.