Virtuals Protocol (VIRTUAL), a standout performer in the AI-focused crypto sector, has cleared a key technical level and is targeting a potential rally toward $5.
The token climbed more than 10% in a single day, reclaiming the psychological $2 level after a brief dip last week. Analysts view this move as the start of a larger breakout.
AI crypto market sentiment is recovering
Crucially, VIRTUAL’s recent price action confirmed the end of a five-month consolidation phase, which took on a cup-like formation after the January peak.
Following an April low of $0.41, the Virtuals Protocol token developed a U-shaped recovery that has now evolved into a bullish breakout above the $2.22 resistance zone—commonly identified as the neckline in technical charts.
This breakout coincides with improving market sentiment around AI tokens, fueled in part by expectations for NVIDIA’s earnings report, which many anticipate will show strong AI-driven revenue growth.
With NVIDIA widely expected to post year-over-year revenue gains, investors are looking for broader upside among AI-aligned cryptocurrencies, including VIRTUAL, which maintains strong ties to AI ecosystems.
Virtuals Protocol price outlook
Fundamentals for VIRTUAL appear to be strengthening as on-chain activity increases and investor interest returns.
Recent analysis shows the price-to-daily-active-addresses (DAA) divergence metric rose nearly 400% in a single week, indicating a dramatic uptick in user engagement and network activity.
As a leading indicator of price movements, this metric suggests the current rally is driven by organic growth rather than short-term speculation.
At the same time, the Chaikin Money Flow (CMF) indicator remains above zero, signaling ongoing buying pressure and accumulation on the network.
The Bull Bear Power (BBP) histogram has also produced consistent green readings, reinforcing the view that buyers currently dominate market momentum.
Although smart money holders have recently reduced exposure—falling from 11.9 million to 7.1 million tokens—the technical strength appears to offset that outflow.
Beyond chart patterns and on-chain indicators, Virtuals Protocol is gaining traction thanks to a newly announced partnership with a leading blockchain gaming studio.
The collaboration aims to integrate VIRTUAL tokens into upcoming play-to-earn and metaverse titles, expanding the token’s real-world utility beyond speculative trading.
Such strategic initiatives could help sustain demand by introducing VIRTUAL to a broader audience within the gaming ecosystem.
As a result, analysts now view $2.81 as the next meaningful resistance level. A decisive break above that point could clear the path toward the 0.382 Fibonacci retracement around $3.07.
If bullish momentum continues, the token could revisit its all-time high of $5.13 reached in January, completing a full recovery and signaling the potential for a longer-term uptrend.
Traders remain cautious around the $2.24 support zone, however; failure to hold that level would invalidate the bullish thesis and could open the door to a decline toward $1.44.