Virtuals Protocol ($VIRTUAL) recently captured market attention with a significant price rally, yet a deeper dive into its on-chain metrics and technical indicators reveals a more cautious outlook for the cryptocurrency. Despite a substantial short-term surge, the path to sustained recovery remains fraught with challenges.
Unpacking Recent Performance and On-Chain Activity
Over the past 24 hours, Virtuals Protocol witnessed an impressive 33.5% price increase, accompanied by a staggering 391% surge in daily trading volume. This propelled the token above the crucial $1 mark, igniting hopes of a broader recovery. On-chain data presents a mixed picture; while the Mean Coin Age has shown a consistent uptrend since late August, signaling steady accumulation by long-term holders, other metrics raise concerns. Recent spikes in dormant circulation suggest some fear-driven selling, and both daily active addresses and network growth remain significantly below their peak levels from earlier in the year, despite a minor uptick following the latest price jump. For sustained bullish momentum, these network participation metrics will need to see substantial improvement.
Technical Analysis Signals Caution Ahead
Technically, the picture for $VIRTUAL leans bearish despite recent positive indicators like a recovering MACD and new local highs in the Accumulation/Distribution indicator. The token has rallied directly into a formidable supply zone around $1, a level that previously served as support before October's significant sell-off. Reclaiming this key psychological and technical barrier is unlikely to be swift, especially with the broader market also struggling. To truly signal a bullish reversal, $VIRTUAL would need to decisively break past further resistance levels at $1.2 and $1.26, ideally supported by high trading volumes. Until such a breakout occurs, investors are cautioned about the potential for a liquidity grab, possibly leading to a continuation of the prevailing downtrend.
