VIRTUAL made a new all-time high today but started showing signs of weakness. Will it continue further or is the rally over?
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Key Takeaways
The chart suggests an Elliott Wave pattern, currently in the ending move.
Wave 4 formed a contracting wedge pattern, indicating consolidation.
RSI indicates overbought conditions, suggesting a possible correction soon.
The price of Virtuals Protocol (VIRTUAL) has shown strong bullish momentum, breaking out of an ascending channel and reaching an all-time high of $5.14 after a 55% rally. However, overbought conditions and a subsequent 14.77% price drop signal potential caution as the market consolidates.
The 4-hour chart shows the price of Virtuals Protocol forming an ascending channel structure after completing wave 4 of the five-wave Elliott Wave pattern on Dec. 20 at $2.05.
On Dec. 31, price action broke out of the ascending channel, rising from $3.29 to an all-time high of $5.14. This was a 55% rally, indicating strong bullish momentum.
VIRTUALUSD new all-time high reached | Credit: Nikola Lazic/TradingView
The daily Relative Strength Index (RSI) shows overbought conditions, suggesting that the price got slightly overextended as it reached 77.6%.
After the last rise, the price quickly fell from $5.14 to $4.36, around a 14.77% drop. This could be an early sign of the looming reversal or a temporary setback before the price progresses further within its ending wave.
VIRTUAL Price Prediction
The VIRTUAL hourly chart provides a more detailed Elliott Wave analysis of its recent price movements starting from the ascending channel. The ongoing Wave 5 targets higher levels, with a potential peak near the 1.618 extension around $5.83.
VIRTUALUSD consolidation likely before more upside | Credit: Nikola Lazic/TradingView
Wave (iii) of Wave 5 demonstrates strong bullish momentum, while corrective subwaves (a)-(b)-(c) indicate potential retracement zones to monitor during Wave (iv).
Wave (iii) already breached key Fibonacci extensions, including 1.0 at $4.85, confirming strong bullish strength. A retracement for Wave (iv) might test support near the 0.618 ($4.25) or 0.5 ($4.05) retracement levels, offering potential re-entry points for buyers.
The chart structure suggests that Wave (v) could extend above $5.83, if momentum sustains.
Key resistance levels lie at $5.28 (1.272 extension) and $5.83 (1.618 extension), which are critical for Wave (v) completion. Support levels to monitor during retracements include $4.51 (0.786 retracements), $4.25 (0.618) and $4.05 (0.5).
The RSI remains elevated, supporting the possibility of corrective waves before further upward momentum.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Nikola Lazic is a cryptocurrency analyst and investor working in the industry since 2017. He holds a bachelor's degree in Sociology, which enables him to better understand the psychology behind the crowd´s positioning. Consequently his preferred analytical tool is Elliott Wave Theory in combination with price action analysis.
Combining his experience in trading and investing with knowledge in content writing he strives to bring the most accurate and actionable information.
