AI tokens in the cryptocurrency market have experienced a volatile week with a sharp downward trend. According to data from CoinMarketCap, most leading tokens in this group recorded significant declines in the past week.
Except for Story (IP) with a slight decrease of (-7.53%), all other tokens in the top 10 have dropped by double digits, with Artificial Superintelligence Alliance (FET) recording the lowest decline of -16.84%.
Virtuals Protocol (VIRTUAL) is no exception as it decreased by 15.71% in the past week. However, from a technical analysis perspective, this correction opens up attractive opportunities for investors.
Is a buying opportunity approaching?
On the 1-day timeframe, after a strong price increase to $1.19 at the beginning of January, the market has witnessed a deep correction. In a recent report, Coinphoton forecasted the possibility of the price returning to the $0.75 range, and indeed the price range of $0.73-$0.76 is still serving as an important support area. This remains true at the present time, even though recent short-term momentum and capital flow are showing a downward trend.
Source: TradingView
The price has broken through the 20-day and 50-day moving averages, while the CMF indicator has dropped below -0.05, reflecting strong capital withdrawal pressure from the market.
The cash flow on the exchange is shaking the confidence of the buyers.
In addition to technical indicators, the net cash flow index on the exchange is also leaning towards the sellers. Over the past six months, cash flow moving onto the exchange (7DMA) has primarily been positive, indicating that investors continuously bring VIRTUAL to the exchange to sell. Although there have been short periods recording outflows, such as in August, November, and a few recent days, the overall trend remains selling pressure.
Source: Glassnode
This reflects a lack of confidence in the market outlook from holders as they continuously exit positions.
It's time for traders to consider buying.
Although technical indicators and cash flow on the exchange show risks, price action appears to be more clearly directional. VIRTUAL's breakout at the beginning of January, surpassing resistance levels of $0.73 and $1.05 from a months-long downtrend, clearly demonstrated bullish intent.
As long as the support area at the 78.6% retracement level of $0.758 is not broken by the sellers, short-term trend traders can still maintain a positive outlook. This deep correction is an opportunity to accumulate, with the next price targets being $1.19 and $1.33.
https://coinphoton.com/virtual-huong-toi-133.html