The Virtual Protocol (VIRTUAL) has experienced a remarkable surge of 73% since its monthly low on Jan. 13, with the rally gaining momentum following the announcement of new incentives for its ecosystem builders and community.
Currently trading at $3.98, the altcoin has seen a 39% increase from its intraday low on Jan. 16, pushing its market cap above $3.8 billion. The daily trading volume has also soared by 37%, reaching over $821 million as trading activity continues to grow.
Looking at its yearly performance, VIRTUAL has skyrocketed by nearly 37,000%, making it the top-performing asset among the 100 largest cryptocurrencies, according to data from CoinGecko.
Several key reasons have contributed to VIRTUAL’s rally. Firstly, the project introduced a new initiative to support the development of AI agent projects on the platform by offering sustainable rewards for ecosystem builders. These rewards are funded through post-bonding taxes, generated by the platform after AI agents go live and start operating.
In addition, VIRTUAL announced a buyback-and-burn program where approximately 13 million VIRTUAL tokens, accumulated from post-bonding trading revenue, will be used to burn respective agent tokens over a 30-day period. Token burning removes tokens from circulation, creating deflationary pressure that could potentially increase their value.
Furthermore, the revenue generated by the Virtual Protocol has seen a significant increase in recent months, climbing from $240.68k in October to over $2.5 million by mid-January. This revenue growth signifies a rising number of AI agents deployed on the platform and a higher volume of transactions, indicating a flourishing ecosystem that is appealing to investors.
The rally of VIRTUAL coincided with Bitcoin’s surge past $100k and a growing risk-on sentiment in the market, as reflected by the Crypto Fear and Greed Index moving further into the “Greed” zone.
Technical analysis of VIRTUAL’s price action shows that the token remains above the 50-day and 100-day Moving Averages on the 1-day VIRTUAL/USDT chart, indicating bullish dominance in the market. The Relative Strength Index stands at 58, confirming the bullish trend.
Additionally, the Average Directional Index reading of 28 suggests a clear trend strength, while the Moving Average Convergence Divergence indicator shows a potential bullish reversal as the MACD line edges closer to crossing over the signal line.
If VIRTUAL manages to break above its all-time high of $5.07, it could lead to price discovery with a potential target of $5.25, representing a 33% increase from its current price. However, failure to cross above the signal line could invalidate this bullish scenario, potentially leading the altcoin towards the $2.50 psychological support level.