Virtual Protocol (VIRTUAL) has seen a sharp rise in recent days, rising to a two-month high. The token soared due to strong demand from investors, doubling in value in less than a week.
Although bullish momentum remains strong, technical indicators suggest that a short-term correction could be imminent.
Virtual protocols can be reversed
The Relative Strength Index (RSI) is currently above 70, putting VIRTUAL in the overbought zone. This indicates that the holder’s profits have peaked and is often a harbinger of a short-term decline. Especially after such a spike, traders may start to book profits, which could lead to mild selling pressure in the short term.
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Historically, extended periods of RSI indicate that price momentum is outpacing sustainable growth. As investors begin to take profits, the virtual price may temporarily stabilize or reverse before returning to an upward trend.
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The correlation between VIRTUAL and Bitcoin is currently 0.52, indicating a moderate relationship between the two assets. However, with Bitcoin rallying towards $115,000, if this correlation fails to reflect BTC’s strength, it could work against VIRTUAL.
If Bitcoin momentum remains positive while VIRTUAL lags, traders could move capital back into the leading cryptocurrency. This change will increase selling pressure on altcoins.
Soaring virtual prices
As of this writing, VIRTUAL is trading at $1.50, up 105% in just four days. The token has received notable support from investors. Strong on-chain activity and trading volumes continue to support the current valuation.
However, depending on market conditions, VIRTUAL could soon face a short-term decline. If selling pressure increases, the token could fall below the $1.37 support level and widen losses to $1.14 or lower.
VIRTUAL is likely to maintain its momentum if investors choose to hold their positions. A sustained rise above $1.54 could push the token towards $1.65 and even $2.00. A break through this barrier would invalidate the bearish outlook.
