Key Takeaways
Algorand (ALGO) recently reached a high of $0.61, followed by a corrective phase. Following a five-wave impulsive move, the price action is currently consolidating around a critical Fibonacci support level at $0.357.
Momentum indicators show mixed signals, requiring a careful assessment of structure and support zones.
The daily chart shows ALGO forming a clear five-wave impulse, Wave (iii), peaking at $0.61 on Dec. 3 before entering a corrective phase.
The price is testing the 0.5 Fibonacci retracement level at $0.357, which has acted as a significant support zone.
A successful bounce of this area could confirm the end of the correction, allowing for a potential continuation of the larger uptrend.
Momentum indicators suggest that selling pressure has weakened. The daily Relative Strength Index (RSI) hovers near neutral to slightly oversold conditions, increasing the probability of a reaction from buyers.
If this level holds, ALGO could begin forming a base for another leg higher.
A decisive move above $0.416 (0.382 Fibonacci retracement) would further confirm bullish intent.
This level has acted as a rejection zone multiple times and must be broken to establish upward momentum.
However, failure to hold the current support could lead to deeper retracements toward $0.297 (0.618 Fibonacci level).
On the 1-hour chart, ALGO has stabilized within a key accumulation zone. The price has repeatedly tested $0.357 but has not broken lower, indicating buyers are defending this level.
This structure suggests a reversal could be forming, with early signs of demand returning.
If ALGO maintains above $0.357 and gains momentum, an upward move toward $0.416 is likely.
A breakout above this resistance would confirm the resumption of the uptrend, with targets extending toward $0.49 (0.236 Fibonacci retracement) and beyond.
The rise from Dec. 20 could have been a five-wave impulse or an a-b-c-d-e correction. In the first case, the problem arises from the overlapping wave 4 with wave 1, which can only occur in the leading diagonal.
This is why the a-b-c-d-e labeling could be more accurate, meaning that the downside since Jan. 17 has more downside room.
The RSI on the lower timeframe is gradually climbing from oversold levels, reinforcing the potential for a move higher.
However, any rejection at $0.416 could slow down bullish progress temporarily before another push higher.