Virtual Protocol [VIRTUAL] has been attracting attention in the current market climate due to its strong performance amid uncertainty.
However, as of December 30, VIRTUAL, Bitcoin [BTC], Ethereum [ETH], and XRP appear to be facing challenges in gaining traction, sparking concerns about a potential downturn in prices.
Examining the present market conditions, it seems that investors who have held onto their assets long-term are starting to cash in on their gains following a significant 42% increase in value over the past week, during which prices climbed from $2.44 to $3.47.
It is imperative for investors to assess whether prices will stabilize at their current levels or if a downward trend is on the horizon.
Forecasting VIRTUAL’s Price Movements
According to analysis by CryptoCrypto, VIRTUAL recently broke out of a minor four-hour consolidation phase around the $3.70 threshold.
With this breakout, the asset has breached one of its key support levels, potentially allowing bears to push prices down by 7% more to the next support barrier at $3.24.
If VIRTUAL manages to hold above this level, there is a possibility of a price recovery. However, failure to do so could lead to a further decline towards the $2.90 range in the foreseeable future.
Conflicting Sentiments and On-Chain Data
Given the potential for a price decline and recent market fluctuations, traders have shown reluctance in establishing new positions, as per insights from on-chain analytics provider Coinglass.
Reports indicate an 18% decline in Open Interest for VIRTUAL over the past day.
On the other hand, long-term investors are increasing their holdings of the asset, showcasing their belief in its potential and growing interest.
Transaction data regarding VIRTUAL’s movement in and out of exchanges reveals a net outflow of $4.80 million of VIRTUAL during the same period.
In the realm of cryptocurrency, an “outflow” typically signifies the transfer of assets from exchanges to wallets of long-term holders, hinting at potential accumulation and heightened buying activity.
Considering these various on-chain indicators alongside the technical analysis, the short-term outlook for the asset appears bearish, suggesting a forthcoming correction in prices.
Despite this, investors hold a positive stance on VIRTUAL in the long run, which could lead to a price surge following a successful correction.
As of the latest update, VIRTUAL is being traded around $3.46, reflecting a decline of more than 6.45% in the past 24 hours.
During the same timeframe, trading volume has risen by 3.5%, signaling increased engagement from traders and investors compared to the previous day.