Virtual Protocol (VIRTUAL), a cryptocurrency, made headlines today with a significant price rally of over 50%, only to see the gains quickly erode. According to CoinGlass, long-term holders took advantage of the opportunity to sell, leading to a substantial decrease in the asset's value.
Data on spot inflows and outflows revealed that as VIRTUAL's price surged, exchanges worldwide witnessed significant inflows of $13.5 million, the highest recorded since the token's launch. Analysts and experts view this influx as a sign of sell-offs, indicating that whales and investors moved their assets from their wallets to exchanges. This substantial inflow has the potential to create selling pressure and lead to a further price decline, which VIRTUAL has already experienced.
As a result of these inflows, VIRTUAL's initial gains were significantly reduced, dropping from 50% to 14% in less than an hour. At the time of writing, VIRTUAL was trading near $2.32. Notably, the asset also recorded a remarkable 138% surge in trading volume, with figures of $755 million.
Amid this heavy price fluctuation, intraday traders actively participated in the market. VIRTUAL's Open Interest (OI) surged by 25%, hinting at the formation of new positions. At press time, the major liquidation areas were $2.24 on the lower side and $2.45 on the upper side, with traders over-leveraged at these levels. If sentiment shifts and the price soars to $2.45, nearly $6.5 million worth of short positions will be liquidated. Conversely, if sentiment remains unchanged and exchanges continue to see inflows, there is a strong possibility that the price could drop to $2.24, liquidating $3.72 million worth of long positions. These on-chain metrics suggest that bulls currently seem exhausted, while bears have been dominating, potentially signaling a bearish trend.
Besides these on-chain metrics, AMBCrypto's technical analysis revealed that with the latest upside rally, VIRTUAL achieved its breakout target from the inverted head and shoulders pattern. However, this price reversal occurred after the asset hit the strong resistance level of $3, a significant selling zone. VIRTUAL's four-hour chart also revealed that since 1