VIRTUAL has surged 73% since its monthly low on Jan. 13, with the rally accelerating after the project announced new incentives for its ecosystem builders and community.
AI agentic platform Virtual protocol (VIRTUAL) rose to $3.98, 39% higher than its intraday low on Jan. 16, while bringing its market cap to over $3.8 billion at the time of writing. Its daily trading volume was also up 37,% hovering over $821 million amid growing trading activity.
Zooming out to its yearly gains, the altcoin has surged by nearly 37,000%, making it the best-performing asset among the 100 largest cryptocurrencies, according to data from CoinGecko.
There are three key reasons why VIRTUAL rallied today.
First, the project revealed an initiative to support the development of AI agent projects on the platform by providing sustainable rewards for its ecosystem builders. These rewards are funded through post-bonding taxes, which are the fees generated by the platform after the AI agents go live and begin operating. See below.
Through this initiative, the Virtuals Protocol is likely aiming to drive greater adoption of its ecosystem, which could drive interest and recognition from fresh investors. This, in turn, is expected to contribute to long-term growth and potential value appreciation of its primary utility and governance token VIRTUAL.
Second, the project has announced a buyback-and-burn initiative, in which nearly 13 million VIRTUAL tokens, accrued 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. Token burning permanently removes these tokens from the circulating supply, creating deflationary pressure that can potentially increase their value.
Third, the revenue generated by the Virtuals Protocol has significantly increased over the past months, rising from $240.68k in October to over $2.5 million by mid-January. This growth in revenue typically indicates an increasing number of AI agents deployed on the platform and a higher volume of transactions among them, signaling a growing and thriving ecosystem—an attribute often viewed positively by investors.
Other factors that may have contributed to VIRTUAL’s rally include Bitcoin’s recent surge past $100k and a growing risk-on sentiment 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 of AI agent-related coins, which has rallied 12.7% over the past day, partly driven by the performance of LUNA and AIXBT—tokens from two popular AI agentic projects deployed on the Virtual Protocol—which recorded respective gains of 24% and 27%.
VIRTUAL price action
On the 1-day VIRTUAL/USDT chart, the token’s price remains above the 50-day Moving Average and the 100-day Moving Average, suggesting bulls have begun to dominate the market. This is confirmed by the Relative Strength Index reading which has moved to 58.
Further, the Average Directional Index showed a reading of 28. A reading above 25 indicates a clear trend strength, which, in this case, reflects the growing bullish trend in the market.
Additionally, the Moving Average Convergence Divergence indicator shows the MACD line (blue) is pointing upwards as it is edging closer to crossing over 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 possibly reaching $5.25, representing a 33% increase from its current price of $3.79.
However, if the MACD line fails to cross above the signal line, this bullish scenario would be invalidated, potentially leading the altcoin to drop toward the $2.50 psychological support level.
