Virtuals Protocol (VIRTUAL) has seen a sharp rally over the past few days, climbing to a two-month high. The token has surged on strong investor demand, doubling in value in less than a week. 

While the bullish momentum remains solid, technical indicators suggest that a short-term correction could emerge soon.

Virtuals Protocol Could See Reversal

The Relative Strength Index (RSI) currently sits above 70, placing VIRTUAL in the overbought zone. This indicates that profits among holders are peaking, often a precursor to short-term pullbacks. Traders may begin securing gains, especially after such a steep rise, potentially leading to mild selling pressure in the near term.

Historically, when RSI remains extended for long periods, it signals that price momentum has outpaced sustainable growth. If investors start locking in profits, the VIRTUAL price could temporarily stabilize or retrace before resuming its uptrend.

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VIRTUAL RSI. Source: TradingView

VIRTUAL’s correlation with Bitcoin is currently at 0.52, indicating a moderate relationship between the two assets. However, with Bitcoin recovering toward $115,000, this correlation could work against VIRTUAL if it fails to mirror BTC’s strength. 

If Bitcoin’s momentum remains positive while VIRTUAL lags, traders could rotate capital back into the leading cryptocurrency. This shift would increase selling pressure on the altcoin. 

VIRTUAL Correlation To Bitcoin. Source: TradingView

VIRTUAL Price Jumps

At the time of writing, VIRTUAL trades at $1.50 after a 105% rise in just four days. The token has received notable support from investors. Strong on-chain activity and trading volume continue to support its current valuation.

However, based on market conditions, VIRTUAL could soon face a short-term pullback. If selling pressure intensifies, the token might fall below the $1.37 support level, extending losses toward $1.14 or even lower.

VIRTUAL Price Analysis. Source: TradingView

If investors choose to hold their positions, VIRTUAL could maintain its momentum. A sustained rally above $1.54 may push the token toward $1.65 or even $2.00. Breaking this barrier would invalidate the bearish outlook.