VIRTUAL eyes $1 breakout – Yet THIS signal raises red flags

The VIRTUAL token has staged a sharp 22% surge in 24 hours, breaking decisively above the $1 price level after weeks of weak trading. This move follows a powerful 86% rally in early January that pushed the token to $1.198 before a subsequent pullback. The recent breakout coincided with improved market sentiment and increased liquidity, as evidenced by a 17% rise in perpetual futures open interest to $55 million.

Leverage Flows: Capital Deployed in Perpetuals

Perpetual futures open interest rose 17% to $55 million, indicating renewed investor willingness to deploy leverage. Liquidations were largely skewed toward short positions, and the aggregate long-to-short ratio remains above 1 at 1.012, signaling that new exposure is largely positioned on the long side. This flow of capital into leveraged contracts supports the recent price breakout.

Volume and Liquidity: The Red Flag

The breakout is happening on thin air. While price surged, spot volume declined sharply, down 36% to $110 million during the rally. This is a classic divergence: strong moves typically see rising volume as more participants join. The weak volume here raises immediate questions about the sustainability of the move without broader market participation.

This pattern is not new. The token's price action mirrors a previous breakout in April 2025, which also failed to hold. The current setup shows recurring resistance at the $1 level, which the token has now broken but may struggle to hold. Without confirming volume, the breakout risks being a false signal, leaving the price vulnerable to a retest of support.