Algorand looks oversold as ALGO enters relief rally; a return to $2.00 is extremely likely

Algorand price had been trading in a protracted range for roughly ten weeks until a false breakout during the week of November 19 occurred. Last week saw the broader cryptocurrency market collapse, with Algorand following suit. But the move now appears very much overdone.

Algorand price to fill massive Ichimoku gap, 50% spike anticipated

Algorand price has spent the past five weeks in a downtrend, with last week resulting in the first weekly close below the prior ten-week trading range. Last week’s close was right on top of the 61.8% Fibonacci retracement of $1.45, but the current week has extended that move lower.

One significant development on Algorand’s weekly chart is the massive gaps between the bodies of the weekly candlesticks and the Tenkan-Sen (blue moving average). Gaps between the bodies of candlesticks and the Tenkan-Sen do not last very long and often resolve within two to six periods.

Additionally, the Composite Index is near a historic low and a historical support level. Finally, the Relative Strength Index is between the two oversold levels in a bull market (50 and 40). The combination of these two oscillators levels at extreme oversold levels in conjunction with the vast weekly gaps on the Ichimoku chart indicates a mean reversion set up with a return to $2.00 extremely likely.

ALGO/USDT Weekly Ichimoku Chart

However, the broader cryptocurrency market remains in a highly volatile state. Therefore, further downside pressure for Algorand price remains likely but is probably limited to a range between the weekly Senkou Span B at $1.00 and the 2021 Volume Point Of Control at $1.10.