Algorand [ALGO]: Is the threat of another round of sell-off real

After plummeting below the $ 0.68 mark, Algorand [ALGO] hovered around the high liquidity range near $ 0.7 for over a week. However, the broader liquidations led the altcoin to accelerate its southbound journey to the $ 0.39 support.

While the current recovery aimed to slam the 23.6% Fibonacci resistance, any close below the 20 EMA (red) could transpose into undesired short-term losses. At press time, ALGO traded at $ 0.4767, down by 2.63% in the last 24 hours.

ALGO 4-hour Chart

Source: TradingView, ALGO / USD

After the buyers dwindled at the $ 0.57 resistance, ALGO saw a string of bearish engulfing candles that pulled the alt to the $ 0.39 floor. This level has offered a strong floor for over a year now. The alt lost nearly 56.87% of its value (from 8 May) and dived towards its 15-month low on 12 May.

Since then, the 23.6% Fibonacci resistance has revealed its stiffness by curbing the buying rallies within the bounds of the $ 0.49 level. To top it up, the recent revival has chalked out a bearish rising wedge on the 4-hour timeframe. The altcoin has been moving into a tighter phase in view of the current pattern alongside the declining trading volumes.

A potential move below the $ 0.47-zone would make way for an unsought correction toward the $ 0.4- $ 0.45 range. With the Supertrend refusing to change its bearish viewpoint and the 50 EMA posing an immediate threat, the buyers had slim chances of an unrestrained recovery beyond the $ 0.49 mark.


Source: TradingView, ALGO / USD

The RSI continued its sluggish phase near the midline and reiterated the near-term squeeze in the current price movements. A sustained close below the equilibrium could transpire into an unwanted pattern breakout on ALGO’s chart.

Further, the CMF dipped below the zero-mark while aiming to test the -0.1 level. A lift-off from this level could potentially bring in some hopes for a bearish invalidation.


Given the confluence of the 50 EMA with the 23.6% level, the bears had a superior edge in defending the $ 0.49 zone. Also, with a rising wedge setup, the bulls needed to substantially ramp up the buying volumes to disregard the selling tendencies.

Last but not least, the investors / traders should keep a close watch on Bitcoin’s movements as ALGO shares a 74% 30-day correlation with the king coin.


Stay in the Loop

Get the daily email from CryptoNews that makes reading the news actually enjoyable. Join our mailing list to stay in the loop to stay informed, for free.

Latest stories

- Advertisement - spot_img

You might also like...