Algorand Under Pressure

Algorand price remains under intense pressure after crashing by over 90% from its all-time high to the current $0.2585. Its market cap has crashed from over $12 billion at its peak to the current $2.1 billion. This article explores why the ALGO token price has crashed and why a rebound is likely.

Algorand Ecosystem Woes

Algorand is a top layer-1 network that aims to be the best alternative to Ethereum and Solana. Its main advantages are the fact that it has never had downtime, has high speeds, and low transaction costs.

Algorand emerged during the 2021 crypto boom and its market cap surged, making it a top-ten coin. Its valuation jumped as more crypto investors sought environmentally friendly alternatives to Ethereum. Since then, however, Ethereum’s ecosystem has grown, with its decentralized finance (DeFi) assets surging to over $70 billion.

Algorand, on the other hand, has struggled to attract a critical mass of developers to its ecosystem. It only has $111 million in total value locked, with most large players in its ecosystem having a small market share.

Folks Finance, the biggest player in the ecosystem, has $177 million in staked assets. Lofty, Reti Pooling, Tinyman, Vestas Equity, and Messina follow it. Algorand has not attracted major developers like AAVE, Uniswap, and PancakeSwap.

As a result, it has been surpassed by newer blockchain networks like Berachain, Base, Arbitrum, Sui, Aptos, and Sonic that are performing much better.

Many Algorand activities have not thrived. For example, Algorand inked a deal with FIFA ahead of the last World Cup. While it remains the blockchain of choice for the world’s football regulatory agency, the impact on Algorand’s ecosystem has been limited, with NFT sales totaling about $846,000 in the last 30 days.

Algorand recently launched its staking feature, but data shows only a handful of investors have moved their assets there. ALGO has a staking yield of about 5.9% and a staking market cap of $356 million, representing about 16% of its total assets.

Algorand Price Prediction

While ALGO’s fundamentals are relatively weak, its strong technicals suggest a potential bounce back. The weekly chart shows that the ALGO token formed a strong bottom at $0.090, struggling to drop below this point since 2023. This price marks a double-bottom level.

It broke above the neckline at $0.3233 and has recently retested it. A break and retest pattern is one of the most bullish signs in the market. It has also formed a falling wedge chart pattern, which is a popular bullish indicator.

Algorand’s price has moved into the second phase of the Elliot Wave pattern, which is often followed by a bullish third phase, typically the longest. Therefore, a strong bullish breakout is likely to push the Algorand price significantly higher, potentially to the resistance level at $1.4645, a 50% retracement point, representing about 480% above the current level.

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