• VIRTUAL bulls failed to defend $2.4 and faced rejection during an attempted reclamation.
• The short-term spot demand was encouraging but might be insufficient to turn the bearish tides

Virtuals Protocol [VIRTUAL] saw a 37.2% rally on Friday the 31st of January. This move was quickly undone, as Bitcoin [BTC] reversed from $106k and was trading at $99.4k at press time.

The high inflows of VIRTUAL into exchanges noted recently was a sign of a sell-off. The $2.5 resistance zone wasn’t overcome, and the short liquidations above this resistance zone were swept, paving the way for new lows.

Is VIRTUAL about to turn a corner?

The price action indicated a strong downtrend on the daily timeframe. This has been persistent in the second half of January, when a bullish reaction from the 78.6% Fibonacci retracement level was quickly retraced.

The ATR noted high volatility in the past two weeks, accompanied by significant capital flow out of the market according to the CMF.

The shooting star candlestick and the high trading volume on the 31st of January underlined bearish dominance.

This came after the failure of the $2.67 and $2.4 former support zones. Overall, they indicated that VIRTUAL is headed lower. To the south, the 23.6% retracement level at $1.25 was the next target.