After last week’s failed breakout, the Algorand price is retreating. This may offer the ALGO bulls a chance to accumulate at an attractive entry price.
Algorand is pretty flat in early Sunday trading, higher by $0.0110 to $0.7996.
Despite the most active trading hours ahead of us, it’s a case of so far so good today. ALGO is attempting to snap a 6-day losing streak and is on course to printing a much-needed green daily candle.
If the only factor for the price were potential, Algorand would be valued much higher than its current $2.5 billion market capitalization. And for much of 2021, it was. Of course, the hype surrounding Decentralized Finance’s (DeFi) future disappeared as quickly as the prices in May.
Although I still fear the market is vulnerable to further risk-offs, I believe some assets offer serious long-term value at the right price. Algorand definitely fits the criteria for investors that are prepared to weather price volatility.
Furthermore, the Algorand price may soon work its way lower to what has been an impervious area of support over the last two months.
Looking at the daily price chart, it’s clear that $0.6700- $0.6780 has been a great area for buyers. During May’s meltdown, ALGO recovered 71% after tagging $0.6777. Again during the flush-out in late June, the Algorand price added 39% from the $0.67000 low of the 22nd.
Although ALGO is yet to reclaim the major moving averages (50,100, and 200), bulls should be encouraged the price continues to respect this important level of support.
And in my opinion, if we see a third visit towards $0.6780, it would offer a great opportunity for a limited risk long trade. Buyers may wish to add if the price drops from here, intending to close the position if ALGO closes below $0.6700.
Despite my long-term optimism surrounding the project, crypto investors remain scarred from May’s price action. Therefore, if sentiment on the complex sours, ALGO will likely be taken along for the ride south.
A broader cryptocurrency sell-off has the potential to force the ALGO price beyond the significant support, targeting the November 2020 high of $0.4200. And should that happen, I think there will be no shortage of buyers.
Although, for now, I don’t see that as an immediate threat and remain confident that the $0.6700 support offers a floor price.
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