Algorand (ALGO) is trading at an important confluence of price resistance levels. Whether it breaks down or gets rejected could determine the future long term trend.
ALGO is the native cryptocurrency of the Algorand blockchain network. The weekly chart shows that ALGO price has declined since hitting an all-time high of $2.99 in November 2021. The decline ended on December 26 with a low of $0.159.
While the price rallied afterwards, it failed to break out of the resistance zone. It is currently in the process of forming a higher low.
While the RSI is rising, it is still below 50. As a result, it does not provide any direction for future trend.
If ALGO price breaks down, it could continue higher towards the nearest $0.20 resistance area. However, if it fails to do so, there could be a retest of the $0.159 low.
Algorand (ALGO) Reaches Make-or-Break Level
Technical analysis on the daily time frame shows that Algorand price has declined since forming the lower high on February 21. Although the price started rallying on March 11, it ended with a shooting star candlestick on March 22 (red icon) and a decrease over the next 24 hours. It also validated the $0.235 resistance area. Finally, the rejection came with an RSI rejection from the 50 line.
As a result, it is possible that the upward momentum is complete and a drop will follow.
This possibility is also supported by a rising parallel channel on the four-hour time frame. Corrective movements often occur in such channels, which means that it is expected to break out.
In that case, ALGO price could decline towards the $0.618 Fib retracement support level at $0.198.
On the other hand, a breakout from the channel would invalidate this bearish forecast, indicating that the trend is bullish. In that case, the digital currency would also break out of the long-term resistance line. As a result, there could be an increase to $0.40.
To conclude, there is a confluence of resistance levels between $0.23-$0.24, formed by a short-term ascending parallel channel, a horizontal resistance area, and a long-term descending resistance line. Whether the price breaks above this area or gets rejected could determine the future trend. A rejection would likely lead to a decline to at least $0.198, while a breakout could lead to a 100% increase towards $0.40.
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