Algorand price continued its recovery, surging to a high of $0.2318, its highest level since April 24 as cryptocurrencies bounced back. ALGO has jumped by over 124% from its lowest level this year, bringing its market cap to over $1.7 billion.
Algorand price nears a golden cross
The odds of more ALGO upside are rising as the token nears a golden cross pattern, which happens when the 200-day and 50-day Exponential Moving Averages (EMA) cross each other.
The spread between the two averages has narrowed to just $0.0042, meaning that it could happen if ALGO rises slightly.
In most cases, this pattern usually leads to more gains over time. For example, Algorand price formed a golden cross in January, resulting in a 100% jump to the year-to-date high of $0.3291.
ALGO has more positive technicals. It has moved above the Ichimoku cloud indicator, while the Relative Strength Index (RSI) and the Stochastic Oscillator have all pointed upwards. The RSI has moved to 73, while the Stochastic moved to the overbought level.
Algorand price has moved above the descending trendline, which is an inverse head and shoulders pattern. In technical analysis, this is one of the top bullish signs in the market. The MVRV indicator has also risen to 2.9, pointing to potential gains in the near term.
Algorand has also moved to the 50% Fibonacci Retracement level at $0.2100. Therefore, the outlook for the ALGO token will likely continue rising as bulls target the year-to-date high of $0.3290, which is about 56% above the current level.
It is highly unlikely for Algorand to jump to $1, which would imply a 400% jump from the current level.
On the flip side, a drop below the key support at $0.1818, the 38.2% retracement level will invalidate the bullish view. If this happens, the next point to watch will be at $0.1500.
Read more: Algorand (ALGO) price targets 60% breakout amid demand resurgence
Analysts are bullish on ALGO token
Crypto analysts are bullish on the Algorand price. In an X post this week, MrBags, a crypto analyst noted that the coin was showing strength, pointing to the upcoming staking rewards. Also, Algorand has a low inflation rate of 2.7% until 2030, lower than other popular coins.
If you’ve made it this far, how could you NOT be bullish on $ALGO??
– $ALGO price showing strength while some other notable coins sit stagnant
$ALGO staking rewards coming in December. Only 2.7% annual inflation until 2030 when we’ll be fully distributed
– @travelx__ NFT…
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Some of the potential catalysts for the Algorand price are FiFA Connect, which has handled over 1.3 million transactions, Lofty AI, which has paid $3 million in rental income, and Travelex.
Other analysts note that Algorand price may seek to soar to $1 as investors rotate from the expensive Solana and Ethereum. Solana has recently jumped to $250, making it more expensive to most investors.
Challenges remain
Still, the biggest challenge for Algorand price is its ecosystem, which has remained under pressure over time. Data shows that Algorand, one of the oldest layer-2 networks has only $106 million in total value locked (TVL). This is a tiny figure compared to other newer blockchains.
In contrast, Solana has over $8 billion in assets, while Base, which was launched last year, has 43.2 billion and 1.3 million users. Sui has also accumulated $1.6 billion.
Algorand also has little going on in its DEX ecosystem. Solana handled $42 billion in volume in the last seven days while Ethereum, Base, and Arbitrum handled $14 billion, $11.5 billion, and $9.32 billion, respectively.
Algorand, on the other hand, handled just $38 million in that period, making it the 32nd biggest player in the industry. This makes it smaller than many networks like Scroll, Injective, Stellar, and Gnosis.
Algorand’s low volume is mostly because the network has no presence in the meme coin industry, which has helped to propel Solana into the biggest chain for DEX transactions in the crypto sector.
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