VIRTUAL Token Struggles Amid 20% Weekly Plunge as Selling Pressure Mounts
Posted: July 26, 2025
Introduction: VIRTUAL Faces Sustained Downturn Amid Market Weakness
The VIRTUAL token (VIRTUAL) has faced a steep decline over the past week, plummeting over 20% amid mounting selling pressure and liquidity outflows. The downturn comes as derivatives traders exit positions, DeFi activity weakens, and broader memecoin market struggles weigh on sentiment.
Despite the bearish trend, large crypto entities have continued accumulating VIRTUAL, raising questions about whether this signals long-term confidence or an impending sell-off. With open interest declining and funding rates nearing zero, traders remain cautious about the token’s near-term prospects.
This article examines the key factors behind VIRTUAL’s recent struggles, including derivatives market dynamics, memecoin sector performance, and institutional accumulation trends.
Liquidity Drop Rattles VIRTUAL as Open Interest Declines
One of the primary drivers behind VIRTUAL’s recent slump is a sharp drop in liquidity within the derivatives market. Data from CoinGlass reveals that:
- Open Interest (OI) fell by 5.51%, settling at $172.21 million.
- Traders voluntarily withdrew $8.9 million from the market, while liquidations totaled $564,000.
- The Open Interest Weighted Funding Rate dropped to 0.0001%, nearing negative territory—a sign of increasing short positions.
A negative funding rate would indicate that sellers dominate the market, potentially exacerbating downward pressure. The decline in open interest suggests reduced trader confidence, as many opt to exit rather than hold positions amid uncertainty.
Historical Context: Derivatives Impact on Price Trends
This isn’t the first time derivatives activity has influenced VIRTUAL’s price action. In previous market cycles, sharp declines in open interest have often preceded extended downturns unless accompanied by a strong spot market recovery. Given current conditions, traders are watching for signs of stabilization before re-entering leveraged positions.
Memecoin and DeFi Weakness Compound VIRTUAL’s Struggles
VIRTUAL’s decline aligns with broader weakness in the memecoin sector, which has seen a 2.8% drop over the past week (per Artemis). While memecoins remain up 33% monthly, VIRTUAL has underperformed with a 3.45% loss, highlighting its sensitivity to recent corrections.
Additionally, decentralized exchange (DEX) activity has slumped:
- Spot DEX volume plunged from $6.5 million to $650,000 in just one week.
- The drastic reduction suggests traders are exiting positions rather than accumulating at lower prices.
Why Does DEX Volume Matter?
Low spot volumes often indicate fading retail interest, making price recovery more difficult without significant buying pressure from whales or institutions. If this trend persists, VIRTUAL may struggle to regain momentum until broader market conditions improve.
Large Entities Accumulate VIRTUAL—Bullish or Bearish Signal?
Despite the downturn, data from Arkham Intelligence shows that major exchanges like Binance and Bybit have added approximately $67 million worth of VIRTUAL to their holdings. This raises two possible interpretations:
- Bullish Scenario: If exchanges are accumulating for long-term holdings, it could signal confidence in a future rebound and potential supply squeeze.
- Bearish Scenario: If these inflows represent increased exchange reserves rather than accumulation, they could precede a large sell-off, worsening downside pressure.
Comparing Past Institutional Moves
In previous instances where large entities accumulated tokens during downturns (e.g., Bitcoin in early 2023), sustained buying eventually led to price recoveries. However, if these inflows are merely exchange reserve adjustments—rather than strategic accumulation—the selling pressure could intensify.
Conclusion: What’s Next for VIRTUAL? Key Factors to Watch
VIRTUAL’s recent struggles stem from multiple factors: declining derivatives interest, weak memecoin and DeFi activity, and uncertainty around institutional accumulation. While large holders continue adding to their positions, traders remain cautious due to bearish technical indicators and low spot volumes.
Strategic Takeaways for Traders & Investors:
- Monitor the funding rate: A move into negative territory could signal further downside risk.
- Track exchange flows: Continued accumulation by large entities may hint at a future rebound if demand outweighs supply.
- Watch memecoin trends: A sector-wide recovery could lift VIRTUAL if sentiment improves.
For now, VIRTUAL remains in a precarious position—its next major move will likely depend on whether institutional accumulation translates into sustained demand or if selling pressure intensifies further.