After a 55% rally, the price of Virtuals Protocol (VIRTUAL) broke out of an ascending channel and hit an all-time high of $5.14, demonstrating strong bullish momentum. However, as the market consolidates, overbought conditions and a subsequent 8.86% price decline suggest possible caution.
On December 20, at $2.05., the price of Virtuals Protocol completed wave 4 of the five-wave Elliott Wave pattern, forming an ascending channel structure on the 4-hour chart.
Price action exited the ascending channel on December 31 and surged from $3.29 to $5.14, the highest level ever recorded. With a 55% rally, there was significant bullish momentum.
The price may have been a little overextended as it hit 77.6%, according to the daily Relative Strength Index (RSI), which indicates overbought conditions.
The price swiftly dropped from $5.14 to $4.36, or about 14.77%, following the most recent increase. This might be a brief setback before the price moves further within its final wave, or it could be an early indication of the impending reversal.
Predicting the Virtual price: not such an easy task
Beginning with the ascending channel, the VIRTUAL hourly chart offers a more thorough Elliott Wave analysis of its most recent price movements. Higher levels are the goal of the current Wave V, which could peak at $5.83, close to the 1.618 extension.
Correctional subwaves (a)-(b)-(c) suggest possible retracement zones to watch during Wave IV, while Wave III of Wave V exhibits strong bullish momentum.
Strong bullish strength was confirmed when wave III already broke through important Fibonacci extensions, including 1.0 at $4.85. Wave IV could retrace and test support close to the 0.618 ($4.25) or 0.5 ($4.05) retracement levels, providing possible points of entry for buyers.
According to the chart's structure, if momentum continues, Wave V might rise above $5.83.
Wave V completion depends on key resistance levels at $5.28 (1.272 extension) and $5.83 (1.618 extension). Support levels to keep an eye on during retracements are $4.05 (0.5), $4.25 (0.618), and $4.51 (0.786 retracements).
The RSI is still high, suggesting that corrective waves could occur before additional upward momentum.
Important levels to keep an eye on
$4.85 is the immediate resistance (1.0 Fibonacci extension).
Fifth Resistance: $5.28 (Fibonacci extension of 1.272).
Major Resistance: $5.83 (possible Wave 5 target, 1.618 Fibonacci extension)
$4.51 (0.786 Fibonacci retracement) is the immediate support.
Secondary Support: Fibonacci retracement at $4.25 (0.618)
$4.05, the 0.5 Fibonacci retracement level, is critical support.