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Virtuals Protocol Token is showing strong potential for growth, with a projected 135% surge to its all-time high. Despite this bullish sentiment, some smart money investors are reducing their holdings.

Virtuals Protocol Price Surge and Market Performance

The Virtuals Protocol token recently broke above a critical resistance level of $2.1270, marking its highest price since January. This represents a significant recovery of over 430% from its April low of $0.4165. The token’s rally coincides with the impressive performance of several key AI tokens within its ecosystem. Notable movers include Ava AI, which surged 30%, along with aixbt, VaderAI, Ribbita, and Game, all posting gains exceeding 15%.

AI Sector Momentum Boosted by NVIDIA Earnings

A substantial catalyst for the rising interest in AI-related tokens, including Virtuals Protocol, is the anticipated NVIDIA earnings report scheduled for release on Wednesday. Analysts project NVIDIA’s Q1 revenue to have climbed 65% year-over-year to $43.17 billion, with earnings per share increasing from $0.61 to $0.73. Additionally, Q2 revenue guidance is expected to reach $45 billion, underscoring the rapid growth of the AI sector.

Should NVIDIA’s earnings outperform expectations, it could further bolster investor confidence in AI tokens such as Virtuals Protocol and Artificial Superintelligence Alliance.

Challenges Facing Virtuals Protocol

Despite the recent rally, Virtuals Protocol faces several challenges. According to available data, the network generated $496,000 in revenue this month, a marked improvement from last month’s $200,000. However, this figure remains significantly lower than the January high of $3.9 million, raising concerns about sustained growth.

Another area of concern is the selling activity by whales and smart money investors. Currently, smart money investors hold 7.1 million VIRTUAL tokens, a sharp decline from the 11.9 million held earlier this month. Similarly, whale holdings have dropped to 24.4 million coins, down from nearly 30 million on May 11.

Virtuals Protocol Price Technical Analysis

From a technical perspective, the Virtuals Protocol price chart reveals a robust upward trajectory. The token has climbed from its April low of $0.4165 to a high of $2.1271, surpassing the 61.8% Fibonacci retracement level. This price action also broke above the upper boundary of an ascending triangle pattern, a bullish indicator.

Furthermore, VIRTUAL has moved above the 50-day Exponential Moving Average (EMA), while the Relative Strength Index (RSI) is trending upward, signaling strong momentum. Based on these indicators, the token could continue its upward movement, targeting its all-time high of $5.1335, which it achieved in January. If reached, this would represent a 135% gain from its current price.

Key Takeaways for Investors

For investors looking to capitalize on the growth potential of AI-driven cryptocurrencies, Virtuals Protocol presents a promising opportunity. However, it is essential to consider the risks posed by declining whale holdings and the token’s revenue fluctuations. Monitoring macroeconomic factors, such as NVIDIA’s earnings performance, could also provide valuable insights into the future direction of the AI token market.

Stay informed about the latest developments in the cryptocurrency and finance sectors to make well-informed investment decisions.

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