The Algorand price has regained its mojo back. The ALGO token has rallied in the past two straight days and has risen by more than 25% from its lowest level this week. This recovery has pushed its total market capitalization to more than $11 billion, making it the 16th biggest cryptocurrency in the world.
Like all cryptocurrencies, the price of Algorand crashed hard this month. After rising to an all-time high of $2.5476 in September, the token crashed by more than 30% as sentiment in the financial market waned. It was not alone.
Other cryptocurrency prices like Bitcoin, Cardano, and Ripple all declined by more than 20%. As a result, the total market capitalization of most cryptocurrencies declined from $2.3 trillion to below $2 trillion.
Therefore, the Algorand price is rallying mostly because sentiment has improved. The risks of Evergrande collapse have eased after the company committed to pay its interest payment this week. Such a collapse would have had significant implications in the broader financial market.
The ALGO price is also rallying as investors buy the hawkish Federal Reserve stance. In theory, a hawkish Fed would have been dovish for ALGO and other prices.
However, the hawkish view was already priced in by the market. In some instances, a sell the rumour, buy the news situation tends to happen. Also, the fact that Algorand is one of the most popular altcoins has also helped.
The daily chart shows that the ALGO price has bounced back in the past few sessions. Along the way, it has formed what looks like a bullish engulfing pattern. This pattern usually happens when a big bullish candle engulfs a smaller bearish candle and is often viewed as a bullish sign. It has also moved above the important resistance level at $1.8056 and the 25-day and 50-day moving averages.
Therefore, the coin will likely keep rising as bulls target the all-time high of $2.50. On the flip side, a drop below this week’s low of $1.50 will invalidate the bullish view.