Virtual Protocol (VIRTUAL) experienced a meteoric rise in April, gaining a remarkable 195% and becoming one of the top-performing cryptocurrencies for the month. This surge followed a pattern of significant growth, with the token’s market cap increasing by over 156% to surpass the $1 billion mark. As of now, VIRTUAL is trading at $1.73 with a market capitalization of $1.13 billion, reflecting a 32.66% price increase and a 98.70% surge in 24-hour trading volume.

Despite the impressive price action, questions are being raised about the sustainability of the rally. While the token has seen strong price gains, signs of a potential pullback are emerging, driven by declining user engagement and weaker decentralized exchange (DEX) volume.

Surge in Price but Declining Activity

Virtual Protocol’s dramatic rise in April was paired with some concerning drops in key metrics. One of the most striking signals of potential exhaustion is the decline in daily active wallets (DAWs). The number of active users on the protocol dropped significantly after the initial hype wore off. In January 2025, the protocol saw 58,641 DAWs on Coinbase’s Base chain and 2,562 on Solana. By April 2025, these numbers plummeted by more than 80%, signaling a sharp decline in user engagement. By April 30, DAWs fell to just 8,328 on Base and 529 on Solana, a sharp 84.9% drop from January’s highs.

This sharp drop in user activity could signal that the initial excitement around Virtual Protocol has cooled, and it may face challenges maintaining its recent momentum.

Volume Increase but Still Below January’s Peak

Despite the price rally, Virtual Protocol’s volume on decentralized exchanges (DEX) shows mixed signals. In the last two weeks of April, DEX volume surged by 683%, reaching $27.6 million—an impressive increase from $3.52 million in mid-April. However, this figure is still nearly 90% lower than the January peak of $267.5 million, reflecting weak market participation despite the price surge.

This suggests that, while there’s a price rally, market depth remains shallow, and there’s little sustained institutional or retail engagement. The limited volume increase highlights that the market might not be as strong as the price movement suggests.

Technical Indicators Point to Possible Pullback

From a technical standpoint, Virtual Protocol’s price is nearing a critical point. The Relative Strength Index (RSI) has reached an overbought level of 84.75, signaling that the market may be overheated. Additionally, the Moving Average Convergence Divergence (MACD) is showing a bullish crossover, indicating strong momentum. However, the steepness of this upward trend suggests the potential for a cooldown or correction soon.

Traders are closely watching the $2.00–$2.20 price range, as this is seen as a critical zone for either a breakout or a pullback. If Virtual Protocol fails to break above this range, a retracement toward support levels at $1.40 or even $1.10 could be on the horizon. However, if the rally continues, there’s a chance it could revisit previous highs around $2.60.

Conclusion

While Virtual Protocol’s massive price increase in April is a noteworthy achievement, concerns about declining user engagement, weak DEX volume, and overheated technical indicators suggest that the token may face challenges in sustaining its current rally. Investors should monitor key price levels, volume trends, and user engagement metrics closely to assess whether the rally will continue or if a pullback is imminent.