Virtuals Protocol (VIRTUAL), has found itself in a precarious position as its token’s price continues to slide, leading analysts to forecast a potential drop to $0.50. Despite expanding into the Solana ecosystem, VIRTUAL is facing significant challenges, including a sharp decline in both revenue and active user participation. With increasing selling pressure and a series of bearish indicators, the token is struggling to maintain any upward momentum.

VIRTUAL Faces Significant Price Drop and Technical Breakdown

As of the latest data, VIRTUAL’s price has dipped to $0.8775, marking a 20.6% decline over the last 24 hours. The token has also seen a 16.43% drop in its trading volume, further highlighting the market’s lack of enthusiasm for the project.

The cryptocurrency has fallen below a critical support level of $0.95, which was previously a key level on its 4-hour chart. This breakdown follows a series of failed attempts to break above a descending resistance trendline, leaving VIRTUAL within a bearish descending triangle pattern. The asset’s inability to hold support at $0.95 could pave the way for further declines, with some analysts suggesting the next target could be as low as $0.50.

Technical indicators add to the bearish outlook. The Relative Strength Index (RSI) for VIRTUAL stood at 36 at the time of writing, entering into slightly oversold territory. While this could suggest the token is due for a potential bounce, the strong selling pressure in the market makes such a reversal uncertain.

AI Token Struggles to Maintain Hype Amid Declining Interest

Virtuals Protocol initially gained significant attention for its innovation in AI-driven blockchain applications. The platform’s ability to create and monetize AI agents was a major selling point that captured the interest of the cryptocurrency community. However, despite a recent expansion into the Solana ecosystem, the token has struggled to maintain its momentum.

The speculative interest surrounding VIRTUAL has begun to cool, as evidenced by its Open Interest (OI), which has fallen by 23.50% over the past 24 hours. This decline in OI indicates that fewer traders are holding positions in the token, which could reflect a broader loss of confidence in the project’s short-term prospects. The Long-Short Ratio for VIRTUAL also stood at 0.91, further suggesting that the market is leaning toward selling, rather than buying, the asset.

Additionally, revenue for Virtuals Protocol has been hit hard. According to data from DeFiLlama, the protocol has seen a 97% drop in revenue over the past two months. This drastic decrease is a significant concern for the long-term viability of the project, as it suggests a lack of ongoing demand for its services and token.

Whale Activity and Declining Investor Confidence

VIRTUAL’s price drop has not only been driven by retail traders but also by the actions of large investors, or whales. One notable example comes from an investor who purchased 4.88 million VIRTUAL for $9.86 million but then sold off the entire position for $5.39 million, incurring a $4.46 million loss in just two months. This loss highlights the difficulty that even large investors are facing in the current market conditions for VIRTUAL.

In addition to whale sell-offs, the number of active addresses associated with the token has steadily declined, further indicating a lack of long-term investor conviction. The decrease in active addresses suggests that fewer users are engaging with the network, which could be a sign that Virtuals Protocol is struggling to keep users engaged or attract new ones.

Technical Indicators Suggest Short-Term Bearish Outlook

The Simple Moving Averages (SMA) for both short-term and long-term trends are flashing strong “sell” signals for VIRTUAL. This suggests that the asset is likely to continue experiencing downward pressure unless there is a significant shift in market dynamics. For VIRTUAL to recover, it would need to see improvements in its network activity, revenue, and overall market sentiment.

Until these conditions are met, the prevailing bearish momentum is likely to persist. Analysts suggest that unless strong signs of recovery emerge, including an increase in user engagement and a rebound in the token’s financial performance, the price could continue its downward trajectory.

The Road Ahead for VIRTUAL

In summary, VIRTUAL’s current outlook is challenging. Despite its expansion to the Solana ecosystem, the token has been unable to reverse its downward momentum, with a 97% revenue drop and a steep decline in active addresses over recent months. The technical analysis suggests further losses, with the price potentially heading toward the $0.50 mark.

For VIRTUAL to regain investor confidence and break out of its current bearish trend, the project would need to demonstrate stronger network growth, revenue stabilization, and a renewed interest in its AI-driven features. Until then, the market remains cautious, and the token’s near-term prospects seem uncertain.

As always, cryptocurrency investors should stay alert to these developments and manage their risk accordingly.