Algorand (ALGO) Maintains Long-Term Support Despite Sharp Fall
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The Algorand (ALGO) price has been decreasing over the past 12 days, but it has finally bounced at a long-term support area.
Despite the upward movement, we cannot consider the trend bullish until Algorand breaks out above the current short-term descending resistance line.
Algorand Trading Range
ALGO has been decreasing since Feb. 12 after trading at a high of $1.86. The drop that followed has taken ALGO to a low of $0.79 on Feb. 23.
This served to validate the $0.90 area as support, a level which previously acted as a resistance. Conversely, the closest resistance area is found at $1.80.
Technical indicators in the weekly time-frame are bullish, indicating that the trend is also bullish.
Future Movement
The daily chart shows that ALGO has bounced at the 0.618 Fib retracement level of the entire upward move. This level also coincides with the previously outlined $0.90 support area.
Despite the bounce, technical indicators are firmly bearish. This is evidenced by the RSI cross below 50 and the bearish cross in the Stochastic oscillator.
A closer look at the two-hour chart reveals a descending resistance line that ALGO has been following since the aforementioned high on Feb. 12. The line coincides with the 0.618 Fib retracement level and the minor $1.22 resistance area.
Despite technical indicators being bullish, we cannot consider the short-term trend bullish until ALGO manages to break out above this line.
ALGO/BTC
Cryptocurrency trader @CointraderNik outlined an ALGO/BTC chart, stating that if the current parabola support holds, ALGO would be expected to increase considerably.
However, the support area failed to hold and ALGO has broken down since the tweet. The drop has taken it to the 2,000 satoshi support area, where it has bounced slightly.
Technical indicators still appear to be bearish. There has been a bearish cross in the Stochastic oscillator and the RSI has crossed below 50.
Therefore, it’s possible that ALGO will consolidate in the range of 2,000-3,200 satoshis. The direction of the trend remains undecided.
Conclusion
The long-term trend for ALGO is considered bullish as long as it’s trading above $0.90. However, the ambiguity in technical indicators and failure to break out above the short-term resistance line fail to confirm the direction of the short-term trend.
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