Algorand [ALGO] recently broke out of a bullish pattern, leading to noticeable gains. Currently, the token is approaching a downward trend line, hinting at further potential growth.
An upward breakout from this trend line could potentially result in a substantial 300% increase in value over the following months.
Is Algorand Poised for a Dual Breakout?
Renowned crypto analyst World of Charts recently highlighted ALGO’s breakout above a bullish descending wedge pattern through a tweet. The token has since surged by 50%, marking a remarkable performance. Notably, in the past seven days alone, Algorand’s price has climbed by more than 32%.
The recent appreciation in ALGO’s value has also boosted its social dominance, showcasing a rise in its popularity among investors.
Furthermore, there has been a significant surge in positive sentiment towards the token, accompanied by a notable increase in trading volume, validating the recent price surge.
Recent price movements have driven ALGO towards a key resistance level. As per insights from World of Charts, a successful breakout from this level could potentially lead to a substantial 300% uptrend in the near future.
While a 300% surge may appear ambitious in the short term, analyzing the token’s on-chain data has provided valuable insights.
Chances of a Bullish Breakout
Data from Coinglass indicates a sharp increase in ALGO’s Open Interest (OI). Although this initially seems bullish, past trends suggest a different outcome. Historically, sharp spikes in ALGO’s OI have often been followed by price corrections, as witnessed back in April when ALGO’s value dipped to $0.17 after a similar OI surge.
At present, Algorand’s fear and greed index stands at 71, denoting a “greedy” market sentiment. Typically, heightened greed often precedes price corrections.
Technical analysis of ALGO’s price chart reveals that it has exceeded the upper Bollinger Bands limit, hinting at a potential price pullback. Should this materialize, ALGO could retrace to around $0.18.
Moreover, the altcoin’s liquidation heatmap suggests a potential support zone between $0.16-$0.18, indicating a likely rebound if prices dip to these levels.
However, sustained bullish momentum could see ALGO making a push towards the $0.3 mark by the end of November, although challenges may lie ahead.