VIRTUAL Exceeds $5 Billion Market Cap but Faces 15% Pullback

Virtuals Protocol (VIRTUAL), the cryptocurrency leading the AI agents narrative in the market, briefly surpassed a market cap of $5 billion on January 2. Like the market cap, VIRTUAL price also hit a new all-time high, exceeding $5 around the same period.

However, the recent rally was short-lived, with the token’s price falling by 15.20% in the past 24 hours. Here’s a closer look at the factors behind the quick retracement and what could lie ahead for VIRTUAL.

Virtuals Protocol Selling Pressure Stops the Upswing

On January 1, Virtuals Protocols market cap was $3.87 billion. Yesterday, it climbed as high as  $5.05 billion. However, as of this writing, things have changed, and VIRTUAL market cap has dropped to $4.28 billion.

Market cap is the product of circulating supply and price. Thus, when either of these increases or decreases, it affects the cryptocurrency’s market capitalization. For VIRTUAL, its total supply of 1 billion tokens is already in circulation.

Therefore, the drop in the metric, as shown below, could be attributed to the price, which fell from $5.05 to $4.28 in the last 24 hours. Furthermore, if the altcoin’s value continues to drop, the protocol’s market cap risks following a similar direction.

Virtuals Protocol Market Cap. Source: CoinGecko

From BeInCrypto’s findings, this double-digit decrease could be linked to notable profit-taking from holders. According to data from Santiment, the on-chain profit volume on January 1 was 5.95 million. This metric measures the level of realized profits within a given period. But on January 2, which was the same window, VIRTUAL climbed to a new all-time high, and the profit volume rose to 6.56 million.

At the current price, this meant that VIRTUAL holders booked profits worth over $28 million. While the profit-taking has not reached that level today, a further hike could cause an extended decline in its market cap and price.

Virtuals Protocol On-Chain Volume in Profit. Source: Santiment

VIRTUAL Price Prediction: Extended Decline Before Rebound

On the 4-hour chart, VIRTUAL retracement happened because the token was overbought, according to the Relative Strength Index (RSI). The RSI is a technical indicator that measures momentum, and also checks if an asset is overbought or oversold.

Readings above 70.00 mean it is overbought, while those below 30.00 indicate that it is oversold. On January 2, the RSI on the VIRTUAL/USD chart showed that the rating hit 79.87, forcing the price to pull back.

But besides that, the Supertrend indicator, which plays a key role in spotting buying and selling areas, flashed an overhead resistance at $5.15. Should the red segment of the Supertrend remain above VIRTUAL’s price, then the altcoin could see a decline to $3.85.

Virtuals Protocol 4-Hour Analysis. Source: TradingView

On the other hand, if bulls successfully drive the price past the $5.15 resistance, this trend might change. In that scenario, VIRTUAL market cap could surpass $6 billion, and the price could inch closer to $7.