VIRTUAL Surges 5% as Ethereum Rallies 3%

Virtuals Protocol (VIRTUAL) is currently at a critical juncture, retesting a key breakdown level that could determine its near-term trajectory. The cryptocurrency market has been gaining momentum, with Ethereum (ETH) leading the way by rallying nearly 3% to trade around $2,500. This positive sentiment has boosted major altcoins, including VIRTUAL, which has surged over 5%.

On the 4-hour chart, VIRTUAL recently broke down from a bearish pennant pattern, a formation that typically signals the continuation of a prior downtrend. Following a sharp decline in late June, the price consolidated in a tightening wedge, forming lower highs and higher lows—a classic pennant structure. This breakdown suggests that VIRTUAL is at a pivotal point, as it is now retesting the underside of the broken pennant, an area that previously acted as support but is now functioning as resistance.

This resistance level coincides closely with the 100-period moving average, currently sitting around $1.57, making it a key decision zone for price action. If VIRTUAL fails to break above this level, it could confirm the breakdown and trigger further downside pressure, with a potential first downside target of $1.41 in the short term. Conversely, if buyers manage to reclaim $1.63, breaking above both the trendline and the 100 MA, this would invalidate the bearish setup and could open the door to a bullish reversal in the short term.

Analysts are closely watching this key level, as it could provide insights into the future direction of VIRTUAL. The outcome of this retest will be crucial in determining whether the cryptocurrency will continue its downward trend or stage a recovery. Investors are advised to monitor the price action closely and consider the potential implications for their portfolios.