Virtuals Protocol (VIRTUAL), the cryptocurrency leading the AI agent narrative today, briefly surpassed a market cap of $5 billion on January 2. Along with the market cap, it also hit a new all-time high (ATH) price, surpassing $5 in the same period.
However, the recent rally was short-lived, with the token’s price dropping 15.20% since then. Here’s a look at the factors behind the rapid pullback and what could lie ahead for VIRTUAL.
Selling pressure halts VIRTUAL’s rise
On January 1, Virtuals Protocol’s market cap was $3.87 billion. The next day, it rose to $5.05 billion. However, at the time of writing, things have changed, and the market cap has fallen to $4.28 billion.
Market value is the product of circulating supply and price. So when either of these increases or decreases, it affects the cryptocurrency’s market capitalization. For VIRTUAL, its total supply of 1 billion tokens is already in circulation.
Therefore, the drop in the indicator, as shown below, can be attributed to the price, which fell from $5.05 to $4.28 in the last 24 hours. Furthermore, if the altcoin’s value continues to fall, the protocol’s market cap is at risk of following a similar direction.
Market Cap of Virtuals Protocol. Source: CoinGecko
According to BeInCrypto’s findings, this double-digit drop could be linked to notable profit-taking by holders. According to data from Santiment, the on-chain profit volume on January 1 was 5.95 million.
This metric measures the level of profits made in a given period. But on January 2, which was the same period, VIRTUAL reached a new all-time high, and the profit volume rose to 6.56 million.
At the current price, this meant that holders had taken profits of over $28 million. While profit-taking did not reach that level today, a further increase could cause a prolonged decline in its market value and price.
Virtuals Protocol On-Chain Profit Volume. Source: Santiment
Price prediction
On the 4-hour chart, the altcoin’s pullback occurred because the token was overbought, according to the Relative Strength Index (RSI). The RSI is a technical indicator that measures momentum and also checks whether an asset is overbought or oversold.
Readings above 70 mean it is overbought, while those below 30 indicate it is oversold. On January 2, the RSI on the VIRTUAL/USD chart showed that the rating reached 79.87, forcing the price to retreat.
But beyond that, the Supertrend indicator, which plays a key role in identifying buy and sell areas, has shown resistance above $5.15. If the red segment of the Supertrend remains above the price of VIRTUAL, then the altcoin could see a drop to $3.85.
Virtuals Protocol 4-Hour Analysis. Source: TradingView
On the other hand, if buyers manage to push the price above the resistance of $5.15, this trend could change. In this scenario, VIRTUAL’s market cap could surpass $6 billion, and the price could approach $7.
The article VIRTUAL drops 15% after new record: what’s next? was first seen on BeInCrypto Brasil.
