Buyers of Algorand [ALGO] finally found rebounding opportunities in the $0.28-zone. Thus, the altcoin rose from the ashes of its multi-monthly lows over the last two days.
The 38.2% and the 61.8% resistance levels have curbed the buying rallies over the last few days. So, a likely retest of the 61.8% level would position ALGO for a near-term pullback in the coming sessions. At press time, ALGO traded at $0.335505, up by 7.78% in the last 24 hours.
ALGO 4-hour Chart
After the buyers failed to break above the $0.41-resistance, ALGO saw a series of red candles after a bearish engulfing candlestick. The alt lost over 34% of its value in just ten days (9-20 June) and plunged toward its 17-month low on 19 June.
The recent up-channel (yellow) trajectory countered the selling pressure and inflicted an over 22% jump in the last two days. But the 61.8% Fibonacci resistance coincided with the upper trendline of the up-channel to create a stiff hurdle for bulls.
ALGO also registered an uptick in trading volumes alongside the recent gains while closing above its EMA ribbons. This reading depicted an edge for the buyers.
The alt would likely aim to test the 61.8% level before facing a near-term setback on the chart. Any break below the up-channel could provoke a downswing toward the $0.3-$0.31 range. Should the 20 EMA cross above the 55 EMA, the EMA ribbons could provide reliable support.
Over the last five days, the RSI resonated with the price action while jumping above the equilibrium. A fall below the 62-60 range would further affirm the chances of a near-term slowdown on the chart.
Furthermore, with the CMF hitting a plateau at the 0.10-mark, any reversals could hamper the short-term buying efforts. Nevertheless, the ADX of ALGO revealed a substantially weak directional trend.
Looking at the up-channel setup approaching the 61.8% Fibonacci resistance, ALGO could see a breakdown from this structure. In this case, the $0.3-$0.31 range can offer rebounding grounds for potential buying endeavors.
However, the investors/traders should keep a close watch on Bitcoin’s movements as ALGO shares an 89% 30-day correlation with the king coin.
Biggest Movers: AVAX, ALGO Among Crypto Losers As U.S. Inflation Hits 40-Year High
AVAX and ALGO both fell by nearly 10% on Friday, following the release of the latest inflation figures in the United States. Data showed that inflation is currently at 8.6%, which is close to a 40-year high. Both AVAX and ALGO moved close to one-week lows on the news.
AVAX moved close to a one-week low on Friday, as prices fell following the release of U.S. inflation data.
Following a high of $25.29 on Thursday, AVAX/USD slipped to a low of $22.78 earlier in today’s session.
This drop took prices close to their support level of $22.50, and comes as AVAX has dropped for four consecutive days.
Today’s low sees prices trade at their weakest point since last Saturday, with many now waiting to see if we could see even more drops this weekend.
Looking at the chart, the 14-day RSI does look as though it has also found a floor at the 35 level, and should this hold, then we may not see any additional slips in price.
This will be positive news for bulls who will likely wait for any signs of reversals prior to re-entering the market.
Like AVAX, ALGO also dropped in value during today’s session, as it too hit its lowest point this week.
As of writing, ALGO/USD hit an intraday low $0.3696, which is nearly 10% below its peak of $0.4156 from yesterday’s session.
Today’s low is slightly above the recent support level at $0.3665, and it’s the first time prices have moved this close to that floor since June 4.
The last time this floor was broken was on May 12, which saw ALGO hit its lowest point since January 2021.
Since then, this level has been relatively durable, however after this week’s decline, there is added pressure from bears looking to recapture a new eighteen-month low.
Will we see bears break ALGO’s support level of $0.3665 this weekend? Let us know your thoughts in the comments.
Eliman brings a eclectic point of view to market analysis, having worked as a brokerage director, retail trading educator, and market commentator in Crypto, Stocks and FX.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Institutional Investors Turn To Competitors As Ethereum Tumbles
As the crypto market has taken a turn for the worse, institutional investors are phasing out their investments in Ethereum. The digital asset had been the victim of multiple outflows that had tanked its total AuM (Assets under management) and this trend has continued this week. Instead of moving to a larger competitor, Bitcoin, institutional investors are now moving to networks that are in direct competition with Ethereum.
Big Money Leaves Ethereum To Algorand
Algorand is one of the leading competitors of Ethereum which has been making waves in the decentralized finance (DeFi) space. Due to this, more institutional investors have been choosing to pitch their tent with the smart contract platform. What this has led to is the movement of institutional investors out of Ethereum and into competitors like Algorand.
Related Reading | Cardano TVL Jumps 30% In 24 Hours As It Recovers To $155 Million
Data from last week shows that while Ethereum continues to fall out of favor with big money, Algorand has been right behind it to soak up all of the inflows. This saw inflows into the DeFi protocol reach $20 million. It is a new high for the digital asset and is evidence of growing interest in other DeFi protocols besides Ethereum.
As for the leading smart contract platform, outflows continue to rock the asset. It saw a total of $11.6 million leaving last week. This has brought its year-to-date outflows to a staggering $250 million. Compared to other altcoins, Ethereum has had the worse luck among institutional investors.
ETH trading below $2,000 | Source: ETHUSD on TradingView.com
These other altcoins, which happen to be DeFi protocols, also recorded inflows for the year. Solana and Tron managed $1.8 million and $0.4 million in inflows respectively, indicating that big money remains bullish on these altcoins.
A Not Too Bad Week
For other coins in the market, last week proved to be not terrible. For example, inflows into bitcoin were $69 million. It may not be as high as other weeks of inflows have been but it speaks volumes about how institutional investors are viewing the market even through the present downtrend. Last week’s inflows brought bitcoin’s year-to-date inflows to $369 million, the opposite of Ethereum, which has been dominated by outflows.
One thing to note though is that BTC’s AuM has declined to the lowest point since July 2021. This is not a direct result of institutional investors not putting money in bitcoin. Rather, it is due to the decline in the value of the digital asset over the last couple of weeks.
Related Reading | Bitcoin Dominates Derivatives Market To End May On A High Note
Other vehicles also enjoyed inflows into them. Multi-asset has been a long-time favorite of institutional investors and this shines through even in a bear market as inflows totaled $4.8 million last week. Short bitcoin inflows also reached $1.8 million.
Across the pond, the European market is starting to see a light at the end of the tunnel. After more than a month of consistent outflows, Europe’s inflows reached $15.5 million. However, North America continues to dominate with total inflows coming out to $72 million.
Featured image from CryptoSlate, chart from TradingView.com
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Algorand [ALGO] testing local lows: A breakdown on the way or a bear trap
Almost three weeks have passed since ALGO set a new 2022 low at $0.34 on 12 May, courtesy of the crash after UST’s collapse. ALGO experienced a notable bounce-back since then, but it has since then given up those gains in favor of a support retest.
ALGO’s latest price action has been attempting to challenge the previous low, with the price dipping to $0.352 within 24 hours at press time. It also looks like ALGO’s price action has been restricted below its descending resistance line. The latter was part of its wedge pattern before the price broke through support towards the end of April.
ALGO’s current price action suggests that the previous low might hold as the new support level. Its price action bounced back from the same level in the last three days.
ALGO seems to be showing signs of healthy accumulation near its recent lows, especially with the MFI dipping below 20. Its RSI did not enter into the oversold zone despite the price drop, and it highlights increased strength near the new support level. However, no significant directional change has been observed, meaning the bears are losing momentum and the bulls haven’t responded.
Will ALGO’s current support level hold, or will it give way to more downside?
This is probably one of the questions that many ALGO holders are asking themselves. Cryptocurrencies have been seeking more side during the ongoing crypto winter, with most of them breaking through structural support levels. Perhaps its on-chain metrics may provide a better look at where it might be headed.
It looks like sentiments in the derivatives market are improving. For example, both the Binance and FTX funding rates improved between 26 and 29 May. Although derivatives do not have a direct impact on the spot market, they do go hand-in-hand with demand in the spot market.
ALGO’s supply held by whales seems to have bottomed out at 46.35% on 22 May. It has also recorded an uptick since then and had increased to 47.30% at press time. The metric suggests that whales are accumulating and this might help bolster the support line.
Although the metrics paint a healthy picture, the market is not out of the woods yet. There is still some risk of more price slippage, hence investors should proceed with caution.
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