Algorand price could break a major supply wall and reach $1.10

Algorand (ALGO) pierced above a double top this morning after bulls caught the minimal fade that occurred and ran the coin higher. Global markets are on the front foot and this is spilling over and adding more tailwinds to cryptocurrencies. Additionally, some positive geopolitical news and an accommodative stance by the Bank of Japan add even more supportive factors for the rally to continue, targeting $1.10 in the near term.

Algorand price tailwinds triple as bears flee the scene

Algorand price is seeing the second phase of the uptrend that started on March 22nd when it bounced to $0.8018. ALGO price got rejected by the 55-day Simple Moving Average (SMA), and pulled back to $0.8018 to find support before bulls swung back into action and broke through the 55-day SMA, the monthly pivot and $0.8679 all at once. It then turned these into support by closing above them. Although price action looked to be at risk on Sunday, forming a double top at $0.9514 with the high from March 22nd, the short-term level was no match for the significant outweighed demand from bulls. 

ALGO price briefly slipped below $0.9514, offering some investors and bulls a chance to to get in quickly before price rallied yet again by another 1%. The target for this week is the nearby $1.00 psychological level, which generally should be no issue for investors to punch through. Rather extraordinary is the $1.10 level 10 cents further north, with the monthly R1 and the pivotal historical level coinciding with the double top from February 7, holding 16% of bookable gains.

ALGO/USD daily chart

The Relative Strength Index (RSI) has broken into the ‘overbought’ area to the upside with these monstrous moves over the past ten trading days. Although investors are waiting to get in and the supply side sees overdemand, it could make the rally come to a sudden halt as traders weigh the risk and possibility of further gains on the table. With the RSI in overbought, they may not consider this the right time to get involved as profits to the upside look limited. Expect a cool-down  in the RSI instead, to provide more interest, which would mean price action gives a bit of room to the downside, falling back towards $0.8679 and the 55-day SMA just below, to temper the overexcited demand side in the trade equation.