Disclaimer: The information presented does not constitute financial, investment, trading or any other advice and is solely the opinion of the author
- Lower and upper time frame charts appeared to be bearish
- ALGO has recorded fluctuating funding rates in recent days
from Algorand [ALGO] value has fallen to mid-January levels. At the time of writing, the token was trading at USD 0.2034. It could even sustain more selling pressure due to the growing uncertainty surrounding Bitcoin [BTC].
Read algorithm [ALGO] Price prediction 2023-24
Bitcoin [BTC] fell below the psychological level of $22K and could put more selling pressure on ALGO. Especially if the bearish sentiment continues for the next few hours/days.
A continued decline, consolidation or recovery for ALGO?
Source: ALGO/USDT on TradingView
ALGO’s depreciation towards the end of February marked a descending channel (orange). On the three-hour chart, ALGO traded sideways between the 61.8% Fib level ($0.2206) and 100% Fib level ($0.2344) before a bearish breakout on March 7. The drop broke through several lower Fib retracement levels, but the price bounced to $0.1983. At the time of writing, the price was attempting to retest the 23.6% Fib level ($0.2068).
ALGO could face rejection at the 23.6% Fib level and move south before returning from $0.1983. Alternatively, it could drop below $0.1983 and exert additional intense selling pressure.
Therefore, there can be two potential trades on the price action. First, short ALGO if the price is rejected at 23.6% Fib level ($0.2068) or the 7-period EMA ($0.2050). The target would be the 0% Fib level ($0.1983). Second, a break below $0.1983 and the lower limit of the channel could provide an additional opportunity to short $0.1898.
A break above the 7-period EMA would invalidate the above statement and make shorting more risky. However, the uptick could bring near-term bulls gains at the 26-period EMA ($0.2137) or 61.8% Fib level ($0.2206).
How many are 1,10,100 ALGOs worth today?
The RSI has been operating below 50 since the beginning of March, while the OBV fell over the same period. This reiterated the limited buying pressure that tipped the scale in favor of the bears in the market.
Fluctuating funding rates can undermine bulls’ efforts
Source: Sentiment
ALGO has recorded volatile demand over the past few days, as evidenced by fluctuations in the funding rate for the ALGO/USDT pair. It could give bears more clout to devalue the token.
In addition, development activity fell sharply, something that could undermine investors’ positive view of the token. In addition, weighted sentiment has remained negative, reflecting the underlying bearish outlook at the time of writing.