ALGO price has risen by 15% in the past two days, despite bearish market conditions.
Algorand managed to make headlines in the market, with the upcoming FIFA World Cup hype generating positive returns for the coin.
Algorand is one of the few large-cap tokens posting decent short-term gains. The prices of most of the top cryptocurrencies are lower after the fall of FTX.
However, Algorand has managed to gain around 15% in the last two days. ALGO was among the top five top gainers on November 16, according to CoinMaketCap data.
While most altcoins don’t show low gains, the ALGO price seems to offer decent short-term returns. The same may be tempting for some market participants, but can the gains continue or be sustained?
ALGO price recovers, what next?
At the time of writing, ALGO price was trading at $0.28, a gain of just over 4%. The coin has recovered from the low $0.25 mark in the last two days.
ALGO price recovery from a two-year low of $0.25 has presented short-term buy signals, the current situation is not favorable for bulls. On the four-hour chart, ALGO price made its first red candle in two days.
The RSI started to pull back, presenting the sellers taking over the market. The 50-period moving average acted as resistance and the price action began to reverse its bullish momentum after testing the level.
Algorand was still feeling negative despite the hype coming from the upcoming FIFA World Cup. Notably, Algorand is FIFA’s official blockchain platform to provide a blockchain-backed wallet solution.
In addition to negative social sentiment, ALGO saw declining business volumes, further presenting low retail interest. Apparently, as the bullish momentum from the ALGO price action fades, Algorand may witness a return to the $0.25 price level.
Algorand on-chain dynamics
The active address count for Algorand indicated that the active address was 73,733, which is not bad. However, looking at the longer-term picture, it is notable that active addresses have flat-lined for most of the past year.
October Active addresses have not seen any major growth, except when the price is above $0.40. Another worrisome point is that Messari data indicated that around 99% of ALGO supply is placed in the top 100 addresses, which could cause trouble for ALGO pricing.
Moreover, Algorand saw a decline in its total value, which shows that institutional investors are losing confidence. Algorand TVL recorded a fall of nearly 50% for the whole of November.
Overall, if you’re planning a long ALGO, beware that the short-term future doesn’t look too bright, and a return to $0.25 wouldn’t be surprising.
A bullish push, however, could invalidate the bearish future and push the price to the next resistance in the $
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