Algorand (ALGO) Price Tests Critical $0.175 Support: Can Bulls Step In?

Algorand (ALGO) has remained trapped in a persistent downtrend, but there may be an opportunity for traders watching key levels.

Sjuul from AltCryptoGems notes that ALGO’s consistent pattern adherence makes current levels worth watching closely.

ALGO Price Respects Descending Channel Structure

ALGO’s price has shown a clear downward trajectory, constrained within a well-defined descending channel. This channel has acted as a reliable guide, with price action consistently respecting both upper and lower boundaries. Such behavior indicates a technically structured market, where each support and resistance level is significant.

The price is approaching the $0.175 level, a critical zone. This area holds importance due to its alignment with the channel’s midline and a horizontal support level.

Analyst Sjuul specifically suggests that traders looking for a quick “scalp” trade might find this $0.175 level attractive. A successful price bounce from this area could lead to a short-term rally back towards the channel’s upper boundary.

Liquidation Data Shows Reduced Recent Volatility

A look at ALGO’s liquidation history provides additional market context. Between mid-November and early February, the market experienced significant liquidation spikes, affecting both long and short positions.

Source: Coinglass

Notable events occurred in early December and early February, where liquidations exceeded $2 million.

However, since March, the volume of these large liquidations has dropped off noticeably. This decrease suggests a recent period with less aggressive leveraged trading in ALGO and potentially lower overall market volatility compared to previous months. Broadly, current support for ALGO appears around the $0.20 mark, with resistance seen near $0.30. These levels remain key reference points for market participants.

Momentum and Indicator Insights

ALGO/USD daily price chart, Source: TradingView

Despite the potential for a short-term bounce, current technical indicators suggest underlying caution is still warranted. As of press time trading at $0.1997, the MACD indicator for ALGO shows bearish momentum, with the MACD line below the signal line and a negative histogram. This aligns with the ongoing downtrend, suggesting a continuation of mild bearish pressure.

Meanwhile, the RSI stands at 46.04, a neutral zone slightly tilted toward oversold. This may indicate that the downside is losing momentum, but a clear reversal signal has yet to emerge.