Despite the positive long-term outlook for Virtuals Protocol [VIRTUAL], concerns have arisen due to a significant pullback from its all-time high of $5.25. The crucial $3 level is teetering under the pressure of selling momentum, posing challenges for buyers.
Recent Bearish Trend Dominates Market Sentiment
Over the past ten days, the token’s price has been on a downward trajectory since January 2, experiencing only a couple of positive trading sessions. Even though the trading volume has decreased compared to the earlier rally to $5.25, the downturn has been substantial.
Virtuals Protocol has recorded a decline of 37.81% in the past ten days, considering the session’s close on January 2 rather than the peak at $5.25. If calculated from the high point, the losses amount to 45%. These figures paint a notably bearish picture for VIRTUAL’s future.
The bears have successfully breached the 61.8% retracement level, and the $3.03 support level also failed to hold. The next potential turning point for a bullish reversal is at the $2.45 mark, representing a crucial support level.
While the MACD indicates a strengthening bearish momentum, it remains above zero, suggesting that the overall long-term trend still holds some bullish sentiment. Despite a slight dip in the A/D indicator due to reduced selling volume, it has not undergone a significant decline.
Both indicators signal short-term bearish trends but also hint at a possibility of recovery once market sentiment shifts in a more positive direction.
Further Downside Risks for VIRTUAL
Although the daily timeframe does not confirm a clear downtrend, the lower timeframe charts exhibit a series of lower highs and lower lows that attract liquidation points. At present, the closest liquidity clusters are identified at $2.77 and $3.55.
Consequently, it is likely that these levels will play a pivotal role in determining the Virtuals Protocol token’s future trajectory in the coming days. Given the prevailing strong bearish momentum in the short term, a potential drop to $2.77 seems plausible.
Disclaimer: The opinions presented in this analysis are personal and do not constitute financial, investment, or trading advice.