- Algorand price shows an uptrend disguised in the form of a bear flag pattern.
- A breakdown of the flag’s lower trendline around $1.03 confirms the bearish thesis.
- ALGO could drop 40% towards the 61.8% Fibonacci retracement level at $0.84.
Algorand price has seen a massive bull rally, but its movement over the last month suggests a bearish outlook.
Algorand price faces an imminent downfall
Algorand price surged nearly 720% between early November 2020 and mid-February. After such a parabolic run, it’s logical to see a correction to either the 61.8% or the 50% Fibonacci retracement level.
Naturally, AGLO tapped both these levels in February after a steep spike in selling pressure, creating a “flag pole.” The altcoin started to trend up soon after, forming higher highs and high lows, which resembled a “flag.”
Algorand price seems to be forming a continuation pattern known as the bear flag. The technical formation forecasts a 40% downswing, which is the flag pole’s height added to the breakout point at $1.05.
This target puts ALGO a little under the 61.8% Fibonacci retracement level at $0.81.
ALGO/USDT 6-hour chart
While it is plausible that Algorand price could trend lower, it isn’t set in stone. Investors need to understand that a stable support barrier at $1.03 coinciding with the 50% Fibonacci retracement level is present. Despite a breakdown of the flag formation, ALGO must slice through the $1.03 level, which is crucial to the bearish outlook. Therefore, a failure to do so will put the altcoin’s fate in bulls’ hands.
Adding credence to the optimistic outlook is the SuperTrend indicator, which flipped bullish on March 15 when Algorand price rose 20% in two six-hour candlesticks. If bulls keep ALGO from breaching the flag formation, it could climb towards a crucial barrier at $1.43.
A decisive close above the $1.43 level could propel ALGO by 30% to $1.84.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.