Algorand (ALGO) price has initiated a short-term breakout. It has nearly reached a crucial resistance level at $0.35-$0.36. A breakout above it would confirm the bullish reversal.
ALGO price has been trading inside an ascending parallel channel since falling to a yearly low of $0.275 on June 16. Such channels usually contain corrective movements. This would mean that an eventual breakdown from the channel is expected.
On Sept. 23, Algorand price seemed to break out from the channel. However, it failed to sustain its upward movement (red circle) and fell shortly afterward.
Currently, ALGO price is trading in the middle of the channel. Until now, the midline has acted as both resistance (red icons) and support (green icons) numerous times. So, a movement above it would provide a bullish ALGO price prediction, while the opposite would be true for a rejection.
The daily RSI is neutral since it is moving freely above and below 50. This movement usually occurs when the trend is undetermined.
Algorand Price Prediction: Bullish Breakout
A closer look at Algorand price action from the two-hour chart gives a bullish outlook. ALGO price has broken out from a descending resistance line that had been in place since the aforementioned Sept. 26 high.
ALGO price is now approaching the main resistance area between $0.35-$0.36. The area is created by the 0.5-0.618 Fib retracement resistance levels and coincides with the midline resistance from the previous channel.
As a result of this confluence of resistance levels, a reclaim of this area would go a long way in suggesting that ALGO price trend is bullish and the upward movement will continue.
Conversely, a rejection could lead to a fall toward the support line of the channel and the yearly lows.
ALGO Price and the $0.36 Resistance
The wave count also notes the importance of the $0.35-$0.36 area. As it stands, there are two main possibilities for the wave count. Algorand price has begun a new five-wave upward movement (white) or an A-B-C correction (red). The former seems more likely.
Currently, ALGO price is trading at the resistance line of a short-term channel, and the potential waves A:C have had a 1:1 ratio (white).
So, a breakout from this level would go a long way in suggesting that the increase is a five-wave upward movement instead. Additionally, it would also confirm a breakout from the previously outlined long-term resistance levels and confirm the bullish technical analysis. This would bode well for the future price.
On the other hand, a sharp rejection would confirm both the bearish Algorand price forecast and resistance levels.
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