VIRTUAL is up 73% since its monthly low on January 13, with the rally accelerating after the project announced new incentives for its ecosystem builders and community.
AI agent platform Virtual Protocol (VIRTUAL) rose to $3.98, up 39% from its intraday low on January 16, while bringing its market cap to over $3.8 billion at the time of writing. Daily trading volume also rose 37.%, hovering above $821 million, amid growing trading activity.
Looking at annual gains, the altcoin is up nearly 37,000%, making it the best-performing asset among the 100 largest cryptocurrencies, according to data from CoinGecko.
There are three main reasons why VIRTUAL rallied today.
First, the project unveiled an initiative to support the development of AI agent projects on the platform by providing sustainable rewards to its ecosystem builders. These rewards are funded through post-bonding taxes, the fees generated by the platform after the AI agents go live and start working. See below.
With this initiative, Virtuals Protocol likely aims to drive greater adoption of its ecosystem, which could drive interest and recognition from new investors. This in turn is expected to contribute to the long-term growth and potential appreciation of its primary utility and governance token VIRTUAL.
Secondly, the project announced a buyback-and-burn initiative, where nearly 13 million VIRTUAL tokens, sourced from post-bonding trading revenue generated by various AI agent projects, will be used to burn the respective agent tokens over a 30-day period. Burning tokens permanently removes these tokens from the circulating supply, creating deflationary pressures that could potentially increase their value.
Third, revenue generated by the Virtuals Protocol has increased significantly in recent months, from $240.68,000 in October to over $2.5 million in mid-January. This revenue growth typically indicates an increasing number of AI agents deployed on the platform and an increased number of transactions between them, indicating a growing and thriving ecosystem – a trait often seen as positive by investors.
Other factors that may have contributed to VIRTUAL’s rally include Bitcoin’s recent surge above $100,000 and a growing sense of risk in the market, as indicated by the Crypto Fear and Greed Index moving further into the “Greed” zone .
VIRTUAL’s rally also coincided with a broader recovery in AI agent-related coins, which rose 12.7% over the past day, driven in part by the performance of LUNA and AIXBT – tokens of two popular AI agent projects that are bet on the Virtual Protocol – which recorded respective gains of 24% and 27%.
VIRTUAL price promotion
On the 1-day VIRTUAL/USDT chart, the token’s price remains above the 50-day moving average and the 100-day moving average, indicating that bulls are starting to dominate the market. This is confirmed by the Relative Strength Index value, which has risen to 58.
Furthermore, the Average Directional Index showed a score of 28. A reading above 25 indicates clear trend strength, which in this case reflects the growing bullish trend in the market.
Furthermore, the Moving Average Convergence Divergence indicator shows that the MACD line (blue) is pointing upwards as it moves closer to crossing the signal line (orange), which will confirm the bullish reversal.
Given these technical signals, VIRTUAL could potentially retest its all-time high of $5.07. A breakout above this level could lead to price discovery, with the token potentially reaching $5.25, representing a 33% increase from the current price of $3.79.
However, if the MACD line fails to break above the signal line, this bullish scenario would be invalidated, potentially sending the altcoin down to the psychological support level of $2.50.
