VIRTUAL price rises as ecosystem tokens AVA, LUNA, aixbt surges

The Virtuals Protocol token rebounded on Tuesday, January 14, a day after forming a doji candlestick pattern as ecosystem tokens rebounded.

Virtuals Protocol (VIRTUAL) rose 32% from this year’s low to $2.93 as investors bought the dip.

Most tokens in the Virtuals Protocol ecosystem were among the best performers. GAME token increased by 17.5%, increasing its market capitalization to over $172.9 million. Luna increased by 30% and aixbt increased by 63%, increasing its valuation to $546 million. Other top-performing tokens in the ecosystem included Sekoia, Acolyte, TAOCat, and WAI Combinator.

VIRTUAL tokens | Source: Virtuals

This rebound has coincided with a broader rise in the cryptocurrency market, particularly in the AI ​​tool sector. Other AI tool tokens such as ai16z, Humans.ai, BasedAI, and Orbit have been among the top gainers in the industry.

It remains unclear whether these gains will continue because the recovery could be part of a dead cat bounce; This could be a temporary rebound for an asset that has been in a prolonged downtrend before resuming its decline.

A significant risk for the Virtuals Protocol is that the most profitable investors have sold most of their tokens. As shown below, profit leader LVT Capital made millions of dollars by exiting all of its positions over the past few weeks.

VIRTUAL token profit leaders sold their money | Source: Nansen VIRTUAL price analysis Virtuals Protocol chart | Source: crypto.news

The daily chart shows that Virtuals Protocol has been in a strong downtrend for the past few weeks, dropping from a record high of $5.1250 to $2.8.

The token is currently trading slightly below the 50% Fibonacci retracement level. On the positive side, it has formed a long-legged doji candlestick pattern with a long lower shadow and a small body. This pattern is often considered a signal for a reversal of the uptrend.

Additionally, VIRTUAL formed a falling wedge formation, which is another bullish indicator. Based on these technical signals, the token could stage a strong recovery in the coming days and investors could target the next resistance level at $4; This represents a potential increase of 40% from the current price.

However, a break below the bottom of the doji at $2.2260 will invalidate the bullish view. In such a scenario, the next key support level to watch would be $1.50.