As the bears did not relinquish their lead, Algorand (ALGO) has been close behind in recent months. utilities, it struggled to overthrow the long-term 23.6% Fibonacci resistance.
As buyers try to keep up their pressure, the odds of defending the USD 0.73 support were high. If this pressure continues, a retest of the mean (20 SMA) of its Bollinger bands (BB) seemed likely. After this, the overall market structure would play a vital role in anticipating a pattern of breakthrough opportunities. As of going to press, ALGO was trading at $0.7349, down 3.82% in the past 24 hours.
ALGO 4 Hour Chart
After the bulls struggled to hold their ground near the $1.8 resistance, ALGO fell steeply and moved towards the $0.7-$0.73 support range. This series has been providing a strong floor for more than a year. The alt lost nearly 61.5% of its value (as of January 5) and retreated to its seven-month low on February 24.
Since then, the solid Fibonacci level of 23.6% has avoided any recovery attempts by ALGO buyers. As a result, the latest retracement saw a sharp pullback between the down-channel (yellow). During this phase, the BB’s average coincided with the upper trendline of this channel and presented strong resistance. Historically, the bulls have shown a great interest in defending the current support range. Also, the price has entered a ‘cheaper’ phase near the lower band of its BB.
As of now, a retest of the $0.76-$0.77, before potentially entering a consolidation phase, looked likely for the alt. Furthermore, most of the reversals from the USD 0.7 level found a recovery towards the upper band of the BB.
The vendors have tested 34 support three times in the past three days. While buyers maintained the flatter support level on the RSI, price action marked lower dips. So revealing a bullish divergence. Likewise, the OBV maintained its immediate support as the price continued to fall, in line with the short-term rising trends.
The oversold values on the BB with the differentials on the RSI and OBV raised the chances of a bullish comeback in the near term. But buyers have yet to ramp up volumes to find a pattern-breaking sustainable rally. To top it up, the investors/traders need to keep a close eye on Bitcoin’s movements as ALGO shares a 74% 30-day correlation with the king coin.
This post What the latest retracement on the ALGO chart reveals about its future price trend?
was published first on https://ambcrypto.com/what-latest-retracement-on-algos-daily-reveals-about-its-price-trend/