Virtuals Protocol (VIRTUAL) has recently faced a significant downturn, experiencing a more than 10% crash in 24 hours and a 16% weekly drawdown, positioning it among the top declining altcoins. This sharp depreciation is largely attributed to a confluence of bearish technical indicators and a worrying decline in network activity, though some signs hint at a potential stabilization point ahead.
Technical Weakness and Shrinking Network Activity
The price action for VIRTUAL has been in a steady decline since the beginning of November, characterized by strongly bearish trend scores and a host of negative technical signals. Key indicators like the 10-day and 25-day Simple Moving Averages are pointing downwards, with the price trading well below them. Reinforcing this bearish outlook are red MACD bars, a negative On-Balance Volume (OBV), and the price trading beneath both the SuperTrend and Ichimoku cloud, all suggesting sustained selling pressure. Compounding these technical woes is a noticeable drop in network activity. Over the past week, the number of VIRTUAL holders has decreased, while token volume has plummeted tenfold from approximately $1 billion to $80 million since November. Furthermore, ecosystem fee revenue has seen a consistent decline over the last five quarters, indicating a broader weakening of the protocol's engagement and utility.
The $0.70 Pivot: A Glimmer of Hope?
Despite the pervasive bearish sentiment, there are emerging indicators suggesting a potential reversal or bounce, particularly around the crucial $0.70 price level. The altcoin's price compression is tightening, often a precursor to a significant move, and the Relative Strength Index (RSI) is currently oversold, adding confluence to a potential upward correction. Analysis of liquidity heatmaps reveals substantial liquidity stacked at the $0.70 zone, implying it could act as a strong support level capable of igniting a bounce if bulls assert control. While losing this zone would escalate selling pressure, the presence of liquidity clusters forming above $0.72 and a concentration around $0.80 suggests these areas could act as price magnets, potentially guiding VIRTUAL north in the short term, albeit with some resistance from fresh liquidity building at $0.70.
