Algorand overbought as ALGO to face selling pressure and return to $1.50
- Algorand price action traded higher, as much as 37% from the December 20 lows.
- Extreme overbought conditions in the oscillators point to some short-term weakness.
- A pullback to the Tenkan-Sen may be necessary before any new bullish momentum can occur.
Algorand price action has been exceptionally bullish over the past week, making substantial gains before and after Christmas. However, some of the most recent improvements may be under threat of not returning.
Algorand price faces a 10% drop for the remainder of 2021
Algorand price looks primed to usher in some profit-taking from the bulls. The Kijun-Sen at the $1.64 value area has proven to be a complex roadblock for buyers to close above. Bears now eye an opportunity to push Algorand south one more time.
The Tenkan-Sen at $1.50 has been a vital support level over the past eight trading days. With the first close above the Kijun-Sen since November 14, a little resistance and return to the Tenkan-Sen are normal. Three other factors point to why Algorand price will drop.
The Relative Strength Index is currently in bear market conditions. There is a sign of clear rejection against the first overbought level at 55, pointing to momentum turning south. The Composite Index has printed hidden bearish divergence, warning that a continuation south will likely occur. And finally, the Optex Bands have printed a strong hook south after hitting extreme overbought levels.
If $1.50 fails to hold as support, bulls will want to watch out for any move and close below the $1.30 value area. A return to the $1.00 price level is extremely likely if bulls can’t support the $1.50 zone.
Author
Jonathan Morgan
Independent Analyst
Jonathan has been working as an Independent future, forex, and cryptocurrency trader and analyst for 8 years. He also has been writing for the past 5 years.
