Rekt Capital: VIRTUAL’s RSI divergence signals downtrend reversal

Virtuals Protocol (VIRTUAL/USDT) is currently at a critical juncture, with technical analysis suggesting a potential reversal of its prolonged downtrend. Market insights from Rekt Capital highlight a confluence of price action and Relative Strength Index (RSI) indicators that could signal a significant shift in market dynamics for the digital asset, potentially paving the way for a sustained recovery.

For several months, VIRTUAL has faced sustained bearish pressure, characterized by resistance at successive lower highs since late May. Numerous attempts at an upward breakout have consistently failed to achieve a decisive, lasting breach. Each rejection highlighted the necessity of a convincing weekly close above the broader downtrend, followed by a successful retest to confirm new support levels. Without such confirmation, prior rallies have consistently lost momentum. Concurrently, the price movement has formed a series of lower lows, consolidating within a narrow range between $1.12 and $1.45. Historically, reclaiming the $1.45 level as support has served as a bullish reversal signal; however, a similar attempt in June faltered under the weight of the dominant downtrend.

Emerging Bullish Divergence on RSI

A notable shift in underlying momentum is now becoming apparent on the daily chart. While VIRTUAL’s price has continued to register lower lows, its RSI has simultaneously formed higher lows, creating a classic bullish divergence. This pattern suggests weakening selling pressure and an increasing likelihood of an upward price correction. Critically, the RSI has already breached its own downtrend line, which had been established since May. This technical development frequently precedes a corresponding price breakout. Should the resilience of the RSI persist, the probability of VIRTUAL breaking its daily price downtrend significantly increases.

Path to Sustained Recovery

Rekt Capital has outlined a sequence of technical milestones essential for VIRTUAL to achieve a more comprehensive breakout:

• A decisive breach of the daily downtrend line.
• The successful reclamation of $1.45, establishing it as a new support level.
• A subsequent retest of the multi-month weekly downtrend that has capped rallies.

Should these conditions materialize, the reinforcing interplay between price structure and momentum could lay the groundwork for a broader, more impactful breakout attempt. The current market positioning of VIRTUAL places it at a pivotal moment, with its trajectory heavily dependent on the confirmation of these key technical indicators. A successful navigation of these levels could restore buyer confidence and offer the token its most significant opportunity in months to emerge from the shadow of its extended bearish phase.