Journalist
Posted:
- One analyst predicted that a rise above resistance would lead to a 300% rally for ALGO
- Statistics suggested that there were chances of a correction in the short term
Algorand [ALGO] recently broke a bullish pattern on the charts, allowing it to post significant gains. In fact, at the time of writingthe token appeared to be approaching a descending trendline.
A A breakout above the same could result in a 300% increase in the coming months.
Is Algorand ready for a double breakout?
World of Charts, a popular crypto analyst, shared a tweet a few days ago about ALGO’s breakout above a bullish falling wedge pattern. Since the breakout, the token has been running at a 50% gain. To put it in perspective, Algorand’s price is up over 32% in the last seven days.
Thanks to ALGO’s latest price hike, the altcoin’s social dominance has skyrocketed – a sign of its growing popularity.
The token also saw a spike in weighted sentiment, indicating rising bullish sentiment. Furthermore, the altcoin’s price increase was also supported by a significant increase in trading volume.
Source: Santiment
ALGO’s latest price action pushed it to a new resistance level. According to one tweet from World Of Charts: If a successful breakout occurs, ALGO could see a 300% price increase in the coming months.
While the 300% increase is a long-term goal and seems unrealistic in the short term, AMBCrypto has still assessed the token’s on-chain data.
Chance of a bullish breakout
Coinglass data showed that ALGO’s Open Interest (OI) increased sharply. While this may seem bullish at first glance, the reality may be something completely different.
Historically, whenever ALGO’s OI reached press-time levels, price corrections followed. A similar episode occurred in April, when ALGO’s price fell to $0.17 after OI spiked.
Source: Coinglass
At the time of writing, Algorand’s fear and greed index had a value of 71, meaning the market was in a ‘greed’ phase. The probability of a price correction always increases when market sentiment turns greedy.
On the price charts, ALGO’s price far exceeded the upper limit of the Bollinger Bands, indicating a possible price correction. If that happens, ALGO could drop to $0.18 again.
Source: TradingView
The altcoin’s liquidation heatmap also revealed a similar possibility. At the time of writing, the token had a strong liquidation floor of $0.16-$0.18.
In the event of a price drop, ALGO will have an opportunity to regain bullish momentum from that range.
Is your portfolio green? View the Algorand profit calculator
However, if the bulls continue to push harder, it won’t be too unrealistic to expect the token to reach $0.3 by the end of November.
Source: Coinglass
