VIRTUAL Token Retreats 20% as Virtuals Protocol Enters Distribution Phase

Virtuals (VIRTUAL) token retreated to $4.23 on Friday, down by almost 20% from its highest level this week, in line with our last prediction.

The price of Virtuals (VIRTUAL) token dropped by almost 20% on Friday, falling to $4.23 after hitting a high earlier this week, coinciding with a broader sell-off within the Virtuals Protocol ecosystem.

The token’s steep pullback comes after a 52,000% surge, as covered in our last Virtuals Protocol price analysis.

仮想通貨の最新ニュースを手に入れよう！

仮想通貨の最新ニュースを毎週お届けします。

仮想通貨の最新ニュースを手に入れよう！

仮想通貨の最新ニュースを毎週お届けします。

The broader sell-off saw GAME by Virtuals (GAME), the largest player in the ecosystem, plunge by over 25%, making it one of the top laggards.

Moreover, the Luna token also dropped by 12.5%, bringing its market capitalization to $130 million.

Other ecosystem tokens, including Prefrontal Cortex, VaderAI, Olyn, and aixCB, each fell by over 20%.

Wyckoff Method explains the VIRTUAL price dips

The steep dips in VIRTUAL’s price can likely be explained by the Wyckoff principles, which explain how price action unfolds. According to Wyckoff, financial assets typically go through four stages.

The first stage, accumulation, is characterized by weak price action. As the chart below shows, the VIRTUAL token remained in a tight range between May and November.

VIRTUAL then entered the markup phase, driven by demand outpacing supply and a growing Fear of Missing Out. This markup phase occurred over the last two months, fueling the token’s surge.

The coin is now entering the distribution phase, which will likely be followed by markdown. It has already formed a doji candlestick, a pattern characterized by a small body and long upper and lower shadows. This pattern typically suggests that an asset opened and closed at the same price, a common reversal indicator.

In the markdown phase, traders who bought during the FOMO period begin to exit their positions. In this case, the VIRTUAL price could drop to the next support level at $3.00, about 30% below the current level.

Virtuals Protocol is the market leader in AI agents

Despite the recent price drop, Virtuals Protocol remains a key player in the crypto industry, particularly in the fast-growing AI agent sector. First, the protocol has a circulating supply of 1 billion tokens, matching its maximum supply, meaning there are no future token unlocks. Instead, there’s a possibility that the network could introduce a token burn mechanism to reduce the circulating supply.

Second, Virtuals Protocol operates in a rapidly expanding industry. Estimates suggest that the AI agent market will grow from $5.29 billion in 2024 to $216 billion by 2035. If these projections hold, Virtuals Protocol is well-positioned to be a major player in the sector.

Furthermore, the protocol already has a thriving ecosystem. GAME by Virtuals has a market cap of over $245 million, while Luna and aixCB are valued at over $129 million and $492 million, respectively. This growing ecosystem indicates that Virtuals Protocol could continue gaining traction.