Algorand price locked within narrow range that will define where ALGO heads next
|- Algorand price is locked in an ascending channel.
- The 50-day SMA support is just below the channel, adding an extra layer of support.
- ALGO now needs a new catalyst to resume the uptrend.
Algorand price rally peaked on February 12, with the Relative Strength Index (RSI) hitting 90.92. This is the highest reading ever recorded since the introduction of ALGO in 2019. A 55% decline followed the historically overbought condition, taking ALGO down to the August 2019 high at $0.85.
Now, Algorand is hovering within a narrow trading range that will determine where it is heading next.
Algorand price overbought condition removed
Algorand price strength today is being supported by a volume thrust, and it is the first time since the consolidation began on February 24. It breaks the long downtrend in the volume profile, but the price strength has not pushed ALGO outside the channel formation.
Until ALGO can close above the upside trendline of the channel on a daily basis, the outlook stays neutral.
Moving past this barrier could send Algorand price to the next major resistance level around the recent all-time high of $1.86, followed by the 2.618 Fibonacci extension level of the August 2019 - March 2020 decline at $2.08.
Additional upside momentum will find resistance at the 1.382 and 1.618 extension levels of the February decline. These hurdles sit at $2.27 and $2,50, respectively.
ALGO/USD 1-day chart
It is worth noting that a daily close below the downside trendline of the channel and the 50-day SMA opens the door for a decline to the August 2019 high at $0.85. Further downward pressure around this crucial support level will likely be followed by a downswing to the $0.77 price level defined by the August 2020 high and the .618 Fibonacci retracement level of the collapse from August 2019 to March 2020.
The 100-day SMA comes in at $0.72, which is another price target to watch in case of a steep decline.
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