Virtuals Protocol’s VIRTUAL token suffered a steep 12% price drop in just 24 hours, marking one of its sharpest single-day declines in recent months. The drop—from $1.56 to $1.37—comes amid a wave of selling by key traders and liquidity providers, raising concerns that further downside could be imminent.

The broader crypto market has been under pressure following confirmation of U.S.–Israel airstrikes on Iran late on June 21. This geopolitical flashpoint injected new uncertainty into an already fragile environment for speculative assets—and VIRTUAL appears to be one of the first casualties.

Bearish Momentum Grows as AI Altcoin Struggles

Despite still boasting a 106% gain over the past 90 days, according to the Altseason Index, VIRTUAL’s recent slide highlights how quickly sentiment can shift in volatile markets. Ranked just ahead of SPX6900, VIRTUAL had been a standout performer in the AI and altcoin sectors—but its lead is now in jeopardy.

June has been rough for the token. The latest decline confirms a month-long bearish trend that shows no sign of easing. Analysts warn that unless sentiment reverses sharply, VIRTUAL could lose its edge in the altcoin rally and enter a longer correction phase.

Spot Market Weakness Signals Fading Interest

Spot market activity paints a grim picture. On both centralized and decentralized exchanges, investor interest appears to be fading fast. Over the past 24 hours, over $680,000 worth of VIRTUAL was sold on major centralized exchanges, cutting short a brief buying wave observed between June 19 and 20.

At the same time, decentralized exchange (DEX) trading volumes have declined, with active traders falling to just 1,600. This drop in participation reflects a growing sense of disinterest among investors and a possible shift in liquidity to more stable or less volatile assets.

$7.8 Million Exit: Bybit and Aerodome Fuel the Fire

The selling pressure isn’t random. According to data tracked by AMBCrypto and Arkham Intelligence, the two primary catalysts behind the $7.8 million sell-off were:

• Short traders on Bybit

• Liquidity providers (LPs) on Aerodome Finance (AERO)

Bybit, which hosts the second-highest trading volume for VIRTUAL, showed a dramatic shift in trader behavior. The funding rate on Bybit plunged to -6.0%, signaling a surge in short positions. This stark contrast to the positive funding rates on Binance (5.0%) and OKX (1.0%) highlights a sharp divergence in sentiment across exchanges.

Meanwhile, Aerodome Finance removed $7.3 million worth of VIRTUAL from its liquidity pools—a clear sign of retreat by LPs who appear to be bracing for further losses.

This double punch of leverage-driven shorts and capital outflows has accelerated the downward pressure on VIRTUAL’s price.

Active Addresses Collapse to Monthly Lows

Beyond exchange data, blockchain activity offers additional evidence of a cooling market. According to Artemis, Active Addresses for VIRTUAL have fallen to just 6,300, their lowest level in a month.

This drop is particularly concerning as it follows a short-lived spike in May, when VIRTUAL saw renewed participation from retail and institutional players. The current decline suggests many traders are not just reducing exposure—they’re exiting entirely.

Low user engagement typically signals weakened demand and often precedes further price depreciation. Without a rebound in participation, any near-term recovery in VIRTUAL’s price could be short-lived.

Is a Deeper Crash Coming?

Given the convergence of technical, on-chain, and geopolitical stressors, analysts warn that the worst may not be over for VIRTUAL. The token’s current position near the $1.37 mark leaves it vulnerable to further losses, especially if market volatility persists.

Should sellers continue to dominate, the next major support level may fall closer to $1.20 or even $1.00—psychologically significant zones that could determine whether VIRTUAL can recover or slide into deeper decline.

Adding to the concern is the token’s deteriorating position on the 90-day Altseason Index. While VIRTUAL has led AI-themed altcoins for months, its recent slump could cause it to lose momentum, paving the way for competing tokens to overtake.

Final Thoughts: VIRTUAL at a Crossroads

The combination of aggressive shorting, liquidity outflows, and collapsing user engagement paints a cautious outlook for VIRTUAL. The token, once a darling of the AI and altcoin narrative, is now at a turning point. Unless market sentiment rebounds and on-chain activity revives, VIRTUAL risks drifting lower in both price and relevance.

For now, investors should closely monitor funding rates, liquidity movements, and participation metrics. These indicators will provide early signals about whether VIRTUAL can stabilize—or if the sell-off is just beginning.