Virtuals Protocol May Have a Hard Time Sustaining $2 – Here’s Why

Virtuals Protocol (VIRTUAL) recently increased significantly by 11% in the past 24 hours, rising from the support level of $1.63 to trade at $1.84.

Despite this upward momentum, the altcoin is still facing challenges from investor sentiment and market conditions. These factors could affect its potential for sustainable growth in the near future.

Virtuals Protocol Loses Investor Interest

After a sudden surge at the beginning of this week, the number of new addresses for Virtuals Protocol has decreased significantly. Currently, the number of new addresses is at its lowest in a month and a half, indicating a decline in investor interest.

This suggests that new investors are losing enthusiasm for Virtuals Protocol, which could signal a loss of momentum for this asset in the cryptocurrency community.

The decline in new address numbers emphasizes a broader trend that could hinder VIRTUAL's ability to create sustainable momentum. The lack of new interest could lead to further consolidation or even a price decrease.

From a macro perspective, Virtuals Protocol is facing some technical challenges. The Average Directional Index (ADX) is showing a significant decline, which could indicate weakening momentum.

The ADX remains above the 25.0 threshold, signaling some strength in the current trend.

However, it risks slipping below this level. If this occurs, it could signal that the recent price uptrend is losing strength. The declining ADX, combined with lower new address activity, suggests that Virtuals Protocol may soon experience a change in its price trend.

Can VIRTUAL Price Overcome the Important Barrier?

Currently, Virtuals Protocol is trading at $1.84 after a significant 11.4% increase in the past 24 hours. The price is now facing a resistance level at $1.93, which could be challenging for further upward movement.

Despite the recent recovery from $1.63, overcoming the $1.93 resistance level remains a crucial challenge for the altcoin's short-term price action.

If the previously mentioned factors continue to negatively impact the market, VIRTUAL may struggle to break through the $1.93 resistance level. This could lead to a consolidation phase, with the price likely to maintain support above $1.63.

However, if selling pressure increases, the price could drop below this support level, potentially reaching $1.50 or even lower.

On the other hand, if broader market conditions become positive, Virtuals Protocol could break through the $1.93 resistance level. Successfully converting this level into a support floor would be crucial for the altcoin to target $2.00.

Further ahead, $2.45 would become the next important resistance level, signaling a reversal of the bearish narrative and opening opportunities for further gains.