VIRTUAL Price Plunge: Can It Recover?
VIRTUAL's Rocky Week: What's Behind the Downturn?
Virtual Protocol [VIRTUAL] has experienced a significant downturn, with its price plummeting over 20% in the past week. This decline reflects broader market challenges and raises questions about its potential for recovery.
Key Factors Influencing VIRTUAL's Price
- Derivatives Market Pressure: Sustained selling pressure in the derivatives market has contributed to VIRTUAL's poor performance.
- DeFi Outflows: Outflows from decentralized finance (DeFi) platforms have further dragged down the token's value.
- Large Entity Activity: Major crypto entities continue to acquire VIRTUAL, a move that doesn't necessarily align with overall market sentiment.
Market analysis suggests that the bearish trend may continue, with indicators pointing towards further declines.
Liquidity Crisis: Open Interest Dives
VIRTUAL saw a sharp decline in the past 24 hours, triggered by substantial liquidity outflows from the derivatives market.
- Open Interest Drop: Closed contracts totaled $9.48 million, causing Open Interest to fall by 5.51% to $172.21 million.
- Voluntary Withdrawals: Traders voluntarily withdrew nearly $8.9 million from the market, signaling uncertainty about VIRTUAL’s future.
The Open Interest Weighted Funding Rate is also weakening, approaching the zero mark at 0.0001%. A negative rate would indicate a market heavily skewed towards sellers.
Broader Market Impact: Memecoins and DeFi Struggle
The underperformance of the broader memecoin market and DeFi sector is adding to VIRTUAL's woes.
- Memecoin Downturn: The memecoin sector dropped 2.8%, impacting VIRTUAL's recent decline.
- DEX Volume Plunge: Spot volume on decentralized exchanges (DEXs) has fallen from over $6.5 million to just $650,000 in the past week, reflecting weakened trading activity.
Accumulation by Large Entities: A Glimmer of Hope?
Despite the market downturn, large entities have been accumulating VIRTUAL.
- Exchange Inflows: Top exchanges like Binance and Bybit have added $67 million worth of VIRTUAL to the market.
Whether this accumulation signals bullish sentiment and a potential supply squeeze or foreshadows a major sell-off remains unclear.
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