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
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.
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.
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/