Algorand (ALGO) recently surged to a high of $0.61 before entering a corrective phase. Following a five-wave impulsive move, the cryptocurrency is now consolidating around a crucial Fibonacci support level at $0.357, prompting traders to assess the next potential price direction.
ALGO Price Analysis: Key Support and Resistance Levels
The daily chart reflects a clear five-wave impulse, with Wave (iii) peaking at $0.61 on December 3. Since then, ALGO has retraced to test the 0.5 Fibonacci retracement level at $0.357, which has acted as a strong support zone.
If this level holds, it could mark the end of the correction and set the stage for a renewed uptrend. A decisive move above $0.416, the 0.382 Fibonacci retracement level, would further confirm bullish intent. This resistance level has historically acted as a rejection zone, making it a crucial hurdle for buyers to overcome.
Conversely, failure to hold $0.357 could lead to a deeper decline, potentially pushing ALGO toward the 0.618 Fibonacci level at $0.297.
Momentum Indicators: Mixed Signals
Technical indicators present mixed signals. The Relative Strength Index (RSI) on the daily timeframe hovers near neutral to slightly oversold conditions, suggesting weakening selling pressure. This increases the probability of a potential bounce from the current accumulation zone.
On the 1-hour chart, ALGO has repeatedly tested the $0.357 level without breaking lower, indicating strong buying interest. If momentum builds above this zone, an upward move toward $0.416 appears likely. A breakout above this resistance could propel ALGO toward $0.49, aligning with the 0.236 Fibonacci retracement level.
However, a rejection at $0.416 could slow down bullish momentum before another attempt higher. The structure suggests the recent downside from January 17 might have further room for decline, especially if the wave count aligns with an a-b-c-d-e correction rather than a leading diagonal impulse.
ALGO Price Prediction: Key Levels to Monitor
For bullish continuation, ALGO must maintain support at $0.357 and break past $0.416. A failure to do so could invite further downside pressure, extending the correction toward lower Fibonacci retracement levels.
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Traders should watch RSI movement and key resistance breakouts to gauge ALGO’s next move. A decisive push above $0.416 could signal renewed bullish momentum, while a breakdown below $0.357 might extend the correction phase.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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