Algorand (ALGO) is currently hovering around a crucial resistance zone that will dictate the long-term trend.
This native token of the Algorand blockchain recently made headlines as Coinbase abruptly halted its staking service without prior warning due to claims by the US exchange regulator (SEC), as reported by BeInCrypto.
Technical analysis shows that ALGO reached an all-time high of $2.99 in November 2021 before experiencing a steady decline, hitting a low of $0.159 on December 26.
While the price has rebounded since then, it has struggled to break through the resistance area and is currently showing signs of forming a rising low.
The RSI index is gradually increasing, but still remains below the value of 50, which does not provide any clear indication of the future trend of ALGO. If the price manages to break through the resistance, it could rise towards the nearest resistance at around $0.20.
If not, it could retest the low at $0.159. On the daily timeframe, the price formed a lower high on February 21 and has been on a downtrend since then.
While the price managed to bounce on March 11, a “shooting star” pattern appeared on March 22, causing the token rate to decrease the following day.
The market tested the $0.235 area for strength, and the rebound of the RSI from the 50 barrier coincided with the price rebound.
Based on this analysis, it is possible that the growth phase has ended and that the price will decline.
The ascending parallel channel on the 4-hour chart supports this scenario, as such channels are typically associated with corrections. In this case, a bearish breakout is likely, which could result in a fall to $0.198 (Fibo level 0.618 correction).
However, a bullish breakout of the channel would negate this bearish outlook and signal a bullish trend, with a possible breakout of the long-term resistance line and growth towards $0.40.
The region of $0.23-$0.24 presents a series of resistance levels, including a short-term ascending parallel channel, a horizontal resistance area, and a long-term descending resistance line.
The price behavior in this area will determine the future trend for ALGO. A bounce from these levels could lead to a fall to at least $0.198, while a successful bullish break could trigger a 100% rally towards $0.40.