ALGO’s Bounce Could Be the Beginning of an Upward Trend

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In Brief
  • ALGO is trading between support and resistance at $0.26 and $0.42.

  • Technical indicators are bullish.

  • The price has possibly begun wave 5.

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The Algorand (ALGO) price has given several bullish reversal signs after bouncing at a significant support level. The price may have begun a new bullish impulse.



Bounce From Support

ALGO reached a high of $0.76 on Aug. 14 and has been declining since. The fall continued until Sept 23, when the price reached a low of $0.261. The price has been rising since.

The previous low caused a deviation below the $2.70 support area, but the price reclaimed it shortly afterward, confirming it as support.



The closest resistance area is found at $0.42, most recently having rejected the price on Sept 10. If the price manages to break out above, the next resistance area would be between $0.51 – $0.57, the 0.5 – 0.618 Fib levels of the entire downward move.

ALGO Chart By TradingView

Technical indicators on the daily time-frame are bullish:

  • The MACD has just crossed into positive territory. The previous two times this occurred (shown with blue arrows), significant price increases followed.
  • The RSI has just crossed above 50.
  • The Stochastic Oscillator has just made a bullish cross and is moving upwards.

Therefore, the price should reach the $0.42 area and possibly break out.

ALGO Chart By TradingView

Wave Count

Cryptocurrency trader @TheEWguy outlined an ALGO chart, in which the price increases all the way to $0.46.

Source: Twitter

The most likely wave count seems to be that the price has completed waves 1 – 4 of a five-wave bullish impulse (shown in black below).

The fact that the bottom of wave 4 barely missed the top of wave 1 makes the formation even more likely. If correct, the first target for the top of wave 5 would be at $1.16, the 1.61 Fib level of waves 1 – 3.

ALGO Chart By TradingView

In BeInCrypto’s Sept 12 analysis, it was stated that:

“Based on the length of the A wave, a possible low could be reached at $0.256, in which case the C and A waves would have a ratio of 1.61:1.”

On Sept 23, the price reached a low of $0.261, validating the prediction and the ratio between waves A:C.

If correct, the price has begun a new bullish impulse (shown in red below) and is currently in wave 3, which could end between $0.51 and $0.55.

A fall below the wave 2 low at $0.2767 would invalidate this particular wave count.

ALGO Chart By TradingView

To conclude, the ALGO price should continue rallying towards the resistance areas outlined above and possibly target $1.16.

For BeInCrypto’s Bitcoin analysis, click here!

Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo. In 2019, he decided to focus full-time on cryptocurrencies and trading.

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