Algorand (ALGO) Price Surges 450% — Expect a Dip Before Another Rally

Key Takeaways

• Algorand (ALGO) broke out from a long-term resistance.
• The Algorand price reached a 938-day high on Dec. 3.
• Can ALGO break out from the long-term $0.65 resistance

The ALGO price fell to a new all-time low of $0.08 in August 2023. It slowed upward afterward, creating a higher low in August next year. The rally accelerated in November and has become parabolic.

After a 450% upward movement, ALGO reached a 932-day high of $0.60.Let’s analyze the ALGO price movement and determine how long it will continue.

ALGO Breaks Out

The weekly time frame ALGO chart shows that the price has increased parabolically since the start of November. So far, it has created five successive bullish weekly candlesticks.

During the upward movement, ALGO broke out from a descending resistance trend line that had existed for over 900 days. This is a strong sign that the correction is over.

If the increase continues, the closest horizontal resistance will be $0.73. This is a critical area, a breakout above which could take ALGO toward a new all-time high.

Technical indicators support ALGO’s upward movement. The Relative Strength Index (RSI) is increasing above 70, while the Moving Average Convergence/Divergence (MACD) is positive.

So, the weekly time frame readings suggest the long-term ALGO trend is bullish.

However, the increase in the parabolic rate is unsustainable in the long run. So, the ALGO price may retrace in the short term before resuming its ascent.

Will ALGO Increase Continue?

The weekly time frame wave count shows that ALGO is likely in wave three of a five-wave upward movement (yellow). Wave three has extended, and the sub-wave count is in white.

Because of the extension, wave three can reach 2.61 times the length of wave one, leading to a high of $0.83.

ALGO will break out from the long-term resistance at $0.73 if this is the case. Then, wave five can take the price toward new highs.

While the long-term count is bullish, the short-term one suggests a retracement is due before the increase continues. This is because there is a completed five-wave increase (black) for sub-wave three, meaning the upward movement could be over.

Also, Algorand’s price trades at the resistance trend line of an ascending parallel channel that has contained wave three. The 12-hour RSI is also extremely overbought.

So, ALGO may begin a correction soon, falling to the 0.382-0.5 Fibonacci retracement support levels of $0.36-$0.42. Afterward, it could complete its increase to $0.85.

Dip Before Rally

The Algorand price has started a bullish trend reversal by breaking out from a long-term descending resistance trend line.

While the rally could continue until at least $0.83, a short-term retracement is due before the upward movement resumes.