Earlier this year, the SEC deemed ALGO token as a security while bringing charges against the US crypto exchange Bittrex, impacting the regulatory landscape for the token and its investors.
Even with pushback from its Foundation, ALGO’s demand has decreased due to investors’ reservations about assets with ambiguous regulatory clarity. Consequently, the token’s value has plummeted by over 87% after a classification resulting in an all-time low.
Before SEC’s decision, Algorand’ system already faced setbacks, notably when MyAlgo, a key wallet within the ecosystem, was compromised in March, leading to over $10 million in losses, denting faith in the platform’s security protocols.
Is the ALGO token price going to recover or will it fall into oblivion?
From its all-time high of $2.60 made on September 12, 2021 and later reached again in November, a clear and uninterrupted downtrend happened.
There have been some temporary stopping points in between but nothing that looked bullish at the time and offered some promise of an upturn. The most significant zone at which the price was expected to stop was at $0.22 – $0.18 but it too was broken in May this year.
This resulted in a new all-time low of $0.081 reached on August 17. ALGO price recovered slightly and is currently being traded at $0.097 but the picture overall still looks grim. It is still being traded in a descending triangle drawn from the all-time high with its outlining levels highly respected.
Examining the wave structure inside the descending triangle, from November 5 – when the price ended its sideways move – another five-wave impulse started. Its wave 3 ended with the fall to an all-time low so, in the near term, a bounce but not a significant recovery is expected.
Another interaction with the descending resistance might occur somewhere at $1.1 or it may appear as a breakout attempt but another lower low looks highly likely. As wave 5 is set to develop, we have projected its target at $0.05 but as there isn’t any price history below $0.18, it is hard to tell where its potential stopping point would be.
Since the security classification, the price of ALGO token has experienced a tremendous lack of investor interest. There weren’t any advancements surrounding the project that could have impacted the sentiment and turned it into a bullish one.
This might change in the future, but for now, following the price structure, we would be primarily expecting another all-time low potentially to $0.05 area.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.