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Algorand price suffers sharp reversal as crypto sentiment weakens
Algorand (ALGO), a pioneering layer-1 blockchain network, has dropped to $0.3, down by 53% from its highest level in December.
The ongoing decline is largely attributed to worsening market sentiment in the crypto industry. The crypto fear and greed index has fallen from the extreme greed level of over 90 in early 2024 to the fear level of 35 today.
Similarly, most altcoins are struggling, as reflected in the altcoin season index, which has dropped to 44.
This downturn has also impacted the Algorand ecosystem, with investors staying on the sidelines. The total value locked in Algorand’s decentralized finance ecosystem has fallen from a December high of $244 million to $114 million today. It has also dropped in ALGO terms, moving from last year’s high of 1.73 billion ALGO to 412 million today.
On the positive side, Nansen data shows that Algorand’s active addresses have risen by double digits in the past 30 days. The network recorded over 2.5 million active addresses, up 27% from the previous period. The number of transactions increased by 8.5% to 44.9 million. However, total fees collected over the last 30 days declined by 7.9% to just $52,300.
Algorand price analysis
The weekly chart shows that ALGO has been in a near three-year consolidation phase, trading within the support range of $0.0931 and $0.3360. It formed a triple-bottom pattern, with a neckline at $0.3360, a historically strong bullish indicator in technical analysis.
Algorand has now developed a small falling wedge pattern and retested the support at $0.3360. A wedge pattern typically signals an upcoming strong bullish breakout. This formation is also part of the second wave of the Elliott Wave pattern.
Therefore, the coin is likely to rebound as it enters the third phase, which is usually the longest and strongest in the Elliott Wave cycle. If this scenario plays out, the next target to watch will be $1.4571, the 50% Fibonacci retracement level, representing a potential 400% gain from the current price. However, a drop below the $0.20 support level would invalidate the bullish outlook.
This article first appeared at crypto.news
