Buyers of Algorand [ALGO] finally found recovery opportunities in the $0.28 zone. For example, the altcoin has risen from its multi-month lows in the past two days.

The resistance levels of 38.2% and 61.8% have slowed down buying rallies in recent days. So a likely retest of the 61.8% level would position ALGO for a near-term pullback in the coming sessions. As of going to press, ALGO was trading at $0.335505, up 7.78% in the last 24 hours.

ALGO 4 Hour Chart

Source: TradingView, ALGO/USD

After buyers failed to break above the $0.41 resistance, ALGO saw a series of red candles following a bearish candlestick engulfed. The alt lost more than 34% of its value in just ten days (June 9-20) and plunged to its 17-month low on June 19.

The recent up-channel (yellow) trajectory countered the selling pressure, causing a jump of more than 22% in the past two days. But the 61.8% Fibonacci resistance has coincided with the upper trendline of the up channel to create a stiff hurdle for bulls.

ALGO also registered an increase in trading volumes alongside recent gains as it closed above its EMA ribbons. This lecture depicted a head start for the buyers.

The alt would likely try to test the 61.8% level before facing a short-term pullback on the chart. Any break below the up channel could trigger a downward move towards the $0.3-$0.31 range. If the 20 EMA crosses the 55 EMA, the EMA ribbons can provide reliable support.

rode

Source: TradingView, ALGO/USD

Over the past five days, the RSI has resonated with price action as it jumped above equilibrium. A drop below the 62-60 range would further confirm the possibility of a short-term slowdown on the chart.

In addition, as the CMF plateaus at 0.10, any reversals could hamper short-term buying efforts. Nevertheless, ALGO’s ADX revealed a significantly weak directional trend.

Conclusion

Looking at the up-channel setup approaching 61.8% Fibonacci resistance, ALGO could see a breakdown of this structure. In this case, the $0.3-$0.31 range could provide a rebound for potential buying efforts.

However, the investors/traders should keep a close eye on Bitcoin’s movements as ALGO shares an 89% 30-day correlation with the king’s coin.



This post algorithm [ALGO] traders should measure the potential of this reversal pattern

was published first on https://ambcrypto.com/algorand-algo-traders-should-gauge-the-potential-of-this-reversal-pattern/

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