algorithm [ALGO] bulls finally found recovery opportunities in the $0.28 zone. The altcoin rose from the ashes from its multi-month lows of the past two weeks.

The resistance levels of 38.2% and 61.8% have limited buying rallies in recent weeks. Buyers may now be trying to break above the reversal pattern. As of going to press, ALGO was trading at $0.3395, up 2.27% in the past 24 hours.

ALGO 4 Hour Chart

Source: TradingView, ALGO/USD

The alt lost more than a third of its value in just ten days (June 9-20) and fell to its 17-month low on June 19.

The recent up-channel (yellow) trajectory countered the selling pressure and caused a jump of more than 28%. But the 61.8% Fibonacci resistance has coincided with the upper trendline of the up channel to create a barrier for bulls.

Since then, ALGO has seen a disturbance as it formed a falling wedge on the 4 hour time frame. Should the price continue to swing above the 200 EMA (green), buyers would aim to maintain the immediate support and break above the reversal pattern. In this case, potential targets would be in the $0.33 $-0.35 range.

However, any bearish crossover of the 20/50/200 EMA could invalidate short-term bullish trends. The sellers would aim to retest the $0.31-$0.32 range before a plausible rebound.

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Source: TradingView, ALGO/USD

For the past few days, the RSI has resonated with the bearish story as it fell below the midline. While it showed a somewhat neutral stance, a consistent swing below the 50 mark would help sellers delay the recovery on the charts.

Nevertheless, the OBV maintained its slightly higher lows, thus confirming a bullish divergence with the price action. But the ADX showed a significantly weak directional trend for the alt.

Conclusion

Looking at the setup of the falling wedge approaching the $0.33 support, ALGO could see an uptick. In this case, the potential goals would remain the same as discussed. However, any bearish crossover on the EMAs could slow buying efforts.

Also, the investors/traders should keep a close eye on Bitcoin’s movements as ALGO shares an 81% 30-day correlation with the king coin.



This post Algorand traders can use this support level for short term gains

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