- Algo has declined by 10.5% over the last 24 hours.
- Algorand’s active addresses soared by 300%.
As a seasoned analyst with over a decade of experience in the cryptocurrency market, I have seen my fair share of bull runs and bear markets. The recent performance of Algorand [ALGO] is intriguing, to say the least.
Over the past month, Algorand [ALGO] saw a massive uptrend, hitting a high of $0.6133.
Over these last two days, I’ve witnessed my altcoin dip down to a staggering $0.459. At the moment, Algorand is being traded at $0.475, which represents a 10.5% drop over the course of the preceding 24 hours.
Previously, the trend for ALGO had been climbing, with a 66.51% increase over the last week and a massive surge of 318.99% in the past month.
According to IntoTheBlock, this recent increase over the past month can be attributed to a rise in adoption and network utilization.
Algo active address soars
According to IntoTheBlock’s examination, there has been a significant rise of approximately 300% in Algorand’s active addresses from the 1st of December onwards.
Based on their perspective, the increase in these addresses indicates significant expansion in network actions. This activity is crucial for a prolonged price surge.
During this stretch, the number of active addresses climbed significantly, going from approximately 123,570 to 427,230. At the moment of writing, however, there’s been a slight drop, with the figure now standing at around 343,790.
Frequently, an increase in actively used addresses can contribute significantly to price increases because it signifies growth in user interest and demand, rather than being driven by market speculation or trends. As the network expands, this increased activity helps fuel price surges.
Impact on price charts?
Just as anticipated, the level of activity within the Algorand network has significantly influenced the trend of Algo’s price chart. For example, a notable spike in active addresses by around 300% corresponded with a recent peak in prices.
As a result, the decrease observed yesterday is linked to a reduction in the number of active wallets.
Based on AMBCrypto’s assessment, it appears that Algo is currently undergoing a market adjustment as shown by the trend across various charts. Over the last two days, the market has shifted to a downturn, with selling pressure significantly outweighing buying activity.
In simpler terms, significant Algorand investors have been offloading more Algo tokens than they’ve been acquiring during the recent period. This has resulted in a decrease in their total holdings, reaching a three-month minimum of approximately 25.34 million Algo tokens that are no longer in their possession.
When large holders sell more, it shows their lack of confidence in the market’s direction.
Furthermore, the number of significant transactions on Algorand has dropped from 309 to 162. This indicates a decrease in whale activity, suggesting fewer large-scale purchases or sales by major account holders.
When whales step aside from the market, it indicates they’re biding their time, seeking the opportune moment to re-enter.
Likewise, many traders are presently placing bets for a decrease in price, as evidenced by the data from Coinglass, which suggests that the majority of investors are adopting a short position strategy.
In summary, the funding rate on Algo’s DyDx exchange has become negative. This signifies a greater interest among traders in taking short positions compared to long ones. Consequently, the majority of traders appear to be pessimistic and are reluctant to pay extra to maintain their trades.
Essentially, while Algo is now trending upward (bullish), there’s an effort by some traders (bears) to reverse this trend and dominate the market. This suggests that the immediate future may lean bearish, potentially leading to a price adjustment or correction in the short term.
Consequently, if sellers dominate the market, Algo should find a supportive level near $0.45. On the other hand, if buyers regain control and push the market forward, the next strong resistance can be expected at approximately $0.71.
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2024-12-05 14:16