Algorand develops hidden bullish reversal as ALGO targets $1.67
|- Algorand price develops bullish Pole Pattern on its Point and Figure chart.
- Conversion to a bull market on the Point and Figure chart creates possibilities.
- Downside pressure is likely if the bulls fail to rally Algorand after the first pullback.
Algorand price has been in a solid and sustained move lower since breaking down below the Ichimoku Cloud in mid-November. Bears have not abated their pressure on Algorand, but a change in direction and the overall trend may be forming.
Algorand price likely to convert to a bull market despite what the candlesticks show
Algorand price action shows an upcoming conversion from a bear market in its Point and Figure chart. One of the interesting characteristics of Point and Figure Analysis is that an instrument is always in a bull market or bear market. And depending on the timeframes you are used to using with a time-based chart like Japanese candlesticks, Point and Figure may switch from bull to bear or bear to bull frequently or infrequently.
The conversion to a bull market on Algorand’s chart will occur when price breaks above the bear market trend line (red diagonal line) at $1.54. But before that, an aggressive entry based on a bullish Pole Pattern reversal could trigger a low-risk, high reward trade opportunity.
Adding to that strength is the current pattern developing known as a Spike Pattern. This pattern occurs when there are fifteen or more Xs or Os in a single column – conditions that Algorand would fulfill if it moves lower to $1.30. The entry on the Spike Pattern is the three-box reversal. Currently, the hypothetical trade setup is a buy stop order at $1.40, a stop loss at $1.36, and a profit target at $1.67. A trailing stop of 3-boxes would help protect any implied profit post entry. However, if Algorand moves lower, the entry trails lower as well. The stop loss remains a four-box stop and the profit target doesn't change.
ALGO/USDT $1.00/3-box Reversal Point and Figure Chart
The hypothetical long setup is invalidated if Algorand price were to close below $1.25.
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