The price of Virtuals Protocol is experiencing a sharp reversal as it enters a new distribution phase after a 52,000% rally.

default(hypothetical) The token fell to $4.23 on Friday, down nearly 20% from this week's high, in line with our expectations Latest prediction.

The token's withdrawal coincided with a widespread sell-off within its ecosystem. Game from Virtuals (game), which is the largest player in the Virtuals Protocol ecosystem, with a share of over 25%, making it one of the biggest laggards.

Luna also fell by 12.5%, bringing its market cap to $130 million. Other ecosystem tokens, including Prefrontal Cortex, VaderAI, Olyn, and aixCB, fell by more than 20%.

The Wyckoff method explains hypothetical price declines

The price of VIRTUAL likely collapsed due to Wyckoff's principles, which explain how price action appears. According to Wyckoff, financial assets typically go through four stages. The first stage, accumulation, is characterized by weak price movement. As the chart below shows, the VIRTUAL token remained in a narrow range between May and November.

VIRTUAL then entered the markup phase, driven by demand outpacing supply and a growing fear of missing out. This tokenization phase occurred over the past two months, resulting in the token increasing.

The coin is now entering the distribution phase, which will likely be followed by a price reduction. You have already formed a doji candlestick, a pattern characterized by a small body and long upper and lower shadows. This pattern usually indicates that the asset was opened and closed at the same price, and is a common reversal indicator.

In the markdown phase, traders who bought during the FOMO period begin to exit their positions. In this case, the hypothetical price may fall to the next support level at $3.00, about 30% lower than the current level.

Virtuals Protocol is the market leader in AI agents

Despite the recent price decline, Virtuals Protocol remains a major player in the cryptocurrency industry, particularly in the fast-growing AI agent sector. First, the protocol has a circulating supply of 1 billion tokens, which corresponds to the maximum supply, meaning there will be no token unlocks in the future. Alternatively, there is a possibility that the network will introduce a token burning mechanism to reduce the circulating supply.

Second, Virtuals Protocol operates in a rapidly expanding industry. Estimates indicate that I have an agent The market will grow from $5.29 billion in 2024 to $216 billion by 2035. If these projections hold, Virtuals Protocol is well positioned to be a major player in this sector.

Furthermore, the protocol already has a thriving ecosystem. GAME by Virtuals has a market cap of over $245 million, while Luna and aixCB are worth over $129 million and $492 million, respectively. This growing ecosystem suggests that the Virtuals protocol could continue to gain more attention.