VIRTUAL explodes 86%, then stalls – Traders, watch THIS closely

**VIRTUAL Token Rallies 86% in Early January, Faces Crucial $1 Level**

The VIRTUAL token surged an impressive 86% within the first week of January, climbing from $0.642 to $1.198. This remarkable buying frenzy energized investors and sparked widespread interest. However, following this initial upswing, demand and momentum have cooled off. At the time of writing, VIRTUAL is trading at $0.975.

A daily session close below the key $1 mark would not bode well for the bulls in the short term, signaling potential weakness ahead.

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**Comparing the Recent Breakout to April 2025**

Crypto investor Gem Insider highlighted similarities between the recent breakout and the one seen in April 2025. Back then, a breach of a descending trendline triggered a strong rally that pushed prices to $2.50. The question now is whether the current breakout can achieve comparable results.

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**Virtuals Protocol Bulls’ Defense of $1 Could Dictate the Next Move**

Like many altcoins, VIRTUAL enjoyed a bullish start to the new year. Data from CoinMarketCap showed that the AI sector expanded by over 20% during the first week of January. VIRTUAL was not alone in outperforming expectations, demonstrating strong investor interest in the sector.

The critical question remains: Can VIRTUAL maintain upward momentum?

The first test lies at the 50% retracement level of the recent impulse move. Defending support at around $0.918 against sellers would increase the likelihood of further gains and potential new highs.

Momentum indicators including the MACD and the Chaikin Money Flow (CMF) showed upward momentum and strong capital inflows at the time of writing—both positive signs for investors.

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**Potential for a Deeper Pullback**

According to Santiment data, there have been spikes in dormant circulation and age consumed metrics, with notable increases on December 30 and January 8. The spike at the end of December hinted at potential capitulation as prices dropped to new multi-month lows.

The sudden price turnaround in early January encouraged profit-taking once momentum began to slow, suggesting that further upward expansion could face resistance unless a new wave of demand and positive investor sentiment emerges.

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**Traders’ Call to Action: Stick to the Structure**

The recent VIRTUAL rally left some imbalances on the 1-day timeframe, particularly around the 78.6% Fibonacci retracement level, now identified as a strong demand zone. Swing traders might consider waiting for a price dip into the $0.73–$0.76 range to initiate long positions.

Overall, the 1-day swing structure remains bullish following the breach of the $1 supply zone earlier this month.

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**Final Thoughts**

The Virtuals Protocol bulls face a crucial test at the $1 psychological level. Should demand weaken and prices close daily below this mark, a retracement toward $0.73–$0.76 seems likely. This range could serve as a key support zone and potentially mark the end of the current pullback.

Investors and traders should monitor price action closely around these levels to inform their next moves.
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