Algorand Poised for Breakout After Bullish Double Bottom Formation and Increased Network Activity
Algorand (ALGO) is on the rise once again. The token has surged more than 58% since hitting its June lows, propelled by a classic double-bottom pattern and a resurgence of network activity.
With notable gains in daily transactions, active addresses, and stablecoin activity, traders are anticipating a possible breakout toward major resistance levels—despite hurdles that lie ahead in the journey to full recovery.
ALGO has recorded a five-day upward trend, reaching its highest levels since May 23. It has risen over 58% from its June lows and is gradually nearing the neckline of the double-bottom formation.
The increase in Algorand’s token value aligns with third-party data showcasing growing user engagement on its network. According to Nansen, transactions on Algorand jumped 30% in the last week, totaling 5.8 million.
Moreover, the count of active addresses surged by 22% to 78,766, while network-generated fees saw an uplift of 25% to $3.6k. These metrics are encouraging, although they still lag notably behind those of rival platforms.
Another significant metric that demonstrated growth last week was its stablecoin supply, which rose by over 77% to $120 million, with the bulk of these stablecoins being USD Coin, totaling $118 million.
Algorand’s price has also benefitted from an uptick in futures open interest, which has reached its highest point since February, climbing to over $110 million, up from $66 million in June.
However, Algorand’s price remains well below its all-time highs, and its standing in the crypto landscape has waned. For example, AlgoFi, a DeFi protocol managing over 55% of its assets, halted operations in July 2023, and no significant new entrants have appeared.
Additionally, Algorand recently lost its partnership with FIFA, the global governing body for soccer. FIFA is now utilizing Avalanche for its NFT initiatives, and a new game, FIFA Rivals, has launched on Polkadot.
Algorand Price Technical Analysis
The daily chart shows that the ALGO price dipped to $0.1447 in June and established a double-bottom formation with a neckline at $0.2580. A double bottom is a well-known bullish reversal signal.
The token has broken above the 78.6% Fibonacci Retracement level at $0.2168 and is trading above both the 50-day and 100-day Exponential Moving Averages.
The Relative Strength Index and MACD indicators are both on an upward trajectory. Consequently, the price of Algorand is likely to keep climbing as bulls target the critical resistance level at $0.2580. A breakout above this point would indicate potential gains towards the 50% retracement level at $0.3612.