- Algorand price shows an uptrend disguised in the form of a bear flag pattern.
- A breakdown of the flag’s lower trendline around $1.03 confirms the bearish thesis.
- ALGO could drop 40% towards the 61.8% Fibonacci retracement level at $0.84.
Algorand price has seen a massive bull rally, but its movement over the last month suggests a bearish outlook.
Algorand price faces an imminent downfall
Algorand price surged nearly 720% between early November 2020 and mid-February. After such a parabolic run, it’s logical to see a correction to either the 61.8% or the 50% Fibonacci retracement level.
Naturally, AGLO tapped both these levels in February after a steep spike in selling pressure, creating a “flag pole.” The altcoin started to trend up soon after, forming higher highs and high lows, which resembled a “flag.”
Algorand price seems to be forming a continuation pattern known as the bear flag. The technical formation forecasts a 40% downswing, which is the flag pole’s height added to the breakout point at $1.05.
This target puts ALGO a little under the 61.8% Fibonacci retracement level at $0.81.
ALGO/USDT 6-hour chart
While it is plausible that Algorand price could trend lower, it isn’t set in stone. Investors need to understand that a stable support barrier at $1.03 coinciding with the 50% Fibonacci retracement level is present. Despite a breakdown of the flag formation, ALGO must slice through the $1.03 level, which is crucial to the bearish outlook. Therefore, a failure to do so will put the altcoin’s fate in bulls’ hands.
Adding credence to the optimistic outlook is the SuperTrend indicator, which flipped bullish on March 15 when Algorand price rose 20% in two six-hour candlesticks. If bulls keep ALGO from breaching the flag formation, it could climb towards a crucial barrier at $1.43.
A decisive close above the $1.43 level could propel ALGO by 30% to $1.84.
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