Virtuals Protocol Might Struggle to Retain $2 – Here’s Why

Virtuals Protocol (VIRTUAL) has recently seen a notable 11% rise in the past 24 hours, bouncing from the support of $1.63 to trade at $1.84. 

Despite this upward momentum, the altcoin continues to face challenges from both investor sentiment and market conditions. These factors may impact its potential for sustained growth in the near future.

Virtuals Protocol Loses Investor Interest

After a spike earlier this week, the number of new addresses for Virtuals Protocol has dipped significantly. Currently, new addresses are at a month-and-a-half low, indicating a decline in investor interest.

This suggests that new investors are losing interest in Virtuals Protocol, which could potentially signal a loss of traction for the asset among crypto enthusiasts.

The decrease in new addresses highlights a broader trend that may hinder VIRTUAL’s ability to build sustained momentum. The lack of fresh interest may lead to further consolidation or even price declines.

VIRTUAL New Addresses. Source: Glassnode

From a macro perspective, Virtuals Protocol is facing some technical challenges. The Average Directional Index (ADX) is showing a sharp decline, which could indicate weakening momentum.

The ADX remains above the threshold of 25.0, signaling some strength in the current trend. 

However, it is at risk of slipping below this level. If this occurs, it could signal that the recent price uptrend is losing its strength. The declining ADX, coupled with lower levels of new address activity, suggests that Virtuals Protocol may soon experience a shift in its price trend.

VIRTUAL ADX. Source:  TradingView

Can VIRTUAL Price Breach Key Barrier 

Currently, Virtuals Protocol is trading at $1.84 after a notable 11.4% rise over the past 24 hours. The price is currently facing resistance at $1.93, which could present a challenge for further upward movement.

While the recent bounce off $1.63 is promising, overcoming the $1.93 resistance remains a crucial test for the altcoin’s near-term price action.

If the factors mentioned earlier continue to impact the market negatively, VIRTUAL may struggle to breach the $1.93 resistance. This could lead to a period of consolidation, with the price likely to remain above the $1.63 support level.

However, if selling pressure intensifies, the price may fall below this support, potentially reaching $1.50 or even lower.

VIRTUAL Price Analysis. Source:  TradingView

On the other hand, if broader market conditions turn bullish, Virtuals Protocol could push past the $1.93 resistance. Successfully flipping this level into a support floor would be critical for the altcoin to target $2.00.

Beyond that, $2.45 would become the next key resistance, signaling a reversal in the bearish thesis and opening the door for further gains.