Algorand ($ALGO ) has faced a challenging period, recently dipping to $0.30—a significant 53% drop from its December peak. The decline reflects broader market sentiment shifts, as the crypto sector grapples with a downturn. The Fear and Greed Index has shifted from extreme greed (90+) earlier this year to a more cautious fear level of 35, signaling investor uncertainty. Additionally, the altcoin market as a whole is facing pressure, as the Altcoin Season Index dropped to 44.
The negative sentiment has been felt across Algorand’s decentralized finance (DeFi) ecosystem, with total value locked (TVL) falling from $244 million in December to $114 million today. The number of ALGO tokens locked has similarly dropped from 1.73 billion to 412 million. Despite this, there are some encouraging signs. Active addresses on the network have grown significantly, with a 27% increase over the past month, reaching over 2.5 million. Transactions also saw an uptick of 8.5%, though total fees collected did decrease by 7.9%, standing at $52,300.
Looking at the technical side, Algorand is currently in the final stages of a nearly three-year consolidation period, with prices fluctuating between $0.0931 and $0.3360. The coin has formed a triple-bottom pattern, a strong bullish signal when the price breaks above the neckline at $0.3360. Additionally, a falling wedge pattern has formed, which typically signals the possibility of an imminent bullish breakout. This is part of the second phase of the Elliott Wave theory, suggesting that a strong rally could be on the horizon.
If the bullish momentum continues and the breakout materializes, the next key target for ALGO is around $1.46, which represents a 50% Fibonacci retracement level. This potential surge could equate to a 400% increase from the current price, positioning Algorand for significant gains. However, should the price drop below the $0.20 support level, the bullish outlook would be invalidated. It’s crucial for investors to stay attentive to market conditions and any signs of recovery in the broader crypto landscape.
