Sharp Decline in Algorand Price as Cryptocurrency Sentiment Takes a Hit
Algorand, an innovative layer-1 blockchain network, experienced a severe reversal in its price, plunging 53% from its peak value in December to rest at $0.3. This drop has been mainly influenced by the unfavourable market sentiment that has taken hold across the cryptocurrency industry.
In recent times, the cryptocurrency fear and greed index have plummeted significantly. It dipped from an extreme high of 90 at the beginning of 2024 to a fear level of 35 currently. This drastic drop has vividly illustrated the volatile and uncertain sentiments mirrored in the crypto market.
Cryptocurrency Industry Struggles
Moreover, not just Algorand, most altcoins seem to be in a dire state. The altcoin season index, a chronological representation of profitability in the altcoin investments, has dipped to a low of 44. This downturn validates the struggling phase in which the cryptocurrencies currently stand.
The Algorand ecosystem has been no exception to this negative spiral. Investors have taken a back seat, avoiding the tumultuous fluctuations playing out recently. The total value locked in Algorand’s decentralized finance ecosystem experienced a massive fall. It dropped from the December high of $244 million and now stands at $114 million. We notice this drop in Algorand terms too, shifting from the highest mark of 1.73 billion ALGO last year to 412 million at present.
Algorand’s Glimmer of Hope
Despite the gloomy picture painted by the declining price, there are still some silver linings. Data from Nansen, a blockchain data intelligence platform, shows an increase in Algorand’s active addresses. Over the past month, there has been a double-digit escalation in the number of active addresses. There are now over 2.5 million active addresses, up 27% from the previous period. Additionally, the number of transactions saw a rise of 8.5%, reaching 44.9 million.
However, during this same 30-day period, the total fees collected dropped by 7.9% to a mere $52,300. This statistic is a clear demonstration of the decrease in trading and transaction fees actualized by the network.
Algorand’s Price Analysis
Looking closer at ALGO’s price performance, the weekly chart suggests that the cryptocurrency has been in a near three-year consolidated phase, trading within a range of $0.0931 and $0.3360. The formation of a triple-bottom pattern was identified within this range. A triple-bottom pattern signifies a bullish indicator in technical analysis, suggesting a potential upward trend.
Furthermore, Algorand developed a minor falling wedge pattern and has retested the support at $0.3360. A wedge pattern often indicates an impending bullish breakout on the market. Additionally, it’s part of the second wave of the renowned Elliott Wave pattern.
Considering these technical indicators, the consensus is that there’s likely to be a rebound in ALGO’s price as it ventures into the third phase of the Elliott Wave cycle. It is well-known that this phase is typically the longest and showcases the highest strength. If these signs hold true for Algorand, the next aim would be around $1.4571. This is a 50% Fibonacci retracement level, which points towards a possible 400% gain from the present price. However, a fall below the $0.20 could render the bullish perspective ineffective, showing only time can confirm the potential trend.
