algorando Price formed a bullish candlestick on October 13th, but this was not enough to initiate a bullish reversal. A breakdown is still expected from the current pattern.
algo is done Rising Inside an ascending parallel channel since falling to an annual low of $0.275 on June 18. ALGO price made a breakout attempt on September 23, but was rejected by the channel’s resistance line (red circle).
The rejection and the ensuing downward price movement were significant as it both validated the resistance line of the channel and confirmed a divergence above the $0.373 resistance area.
While ALGO bounced on 13 October, it is still trading in the lower part of the price channel. So, a breakdown is the most likely scenario.
It is also supported by Daily RSIwhich has fallen below 50 (red mark).
The price of ALGO is $0.24 . can fall to
The weekly chart is showing that the main support area for ALGO is at $0.240. This is an important horizontal price support level that has not been reached since November 2020.
It is important to note that the above yearly low at $0.275 is not forming a Fibonacci or horizontal support level. Therefore, it does not appear that the bullish reversal of the price could continue from that level.
As a result, a downside correction towards the $0.24 area before a reversal appears to be the most likely scenario for Algorand. This is also in line with the bearish readings from the daily chart.
If ALGO price drops to $0.24, it will potentially make a third touch of a Bullish Divergence (Green Line) on the weekly RSI. This will confirm the deviation. Also, it could confirm a long term bullish reversal.
Relief before price breaks
To conclude, both the weekly and daily charts give a bearish prediction. They indicate that ALGO has yet to reach the bottom. The price is predicted to drop by 25% once it breaks out of the current pattern.
The short-term chart offers some chances of relief. This shows that ALGO has broken above the descending resistance line. However, a downside break is likely to resume once Algorand price reaches the $0.348-$0.363 resistance level.
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