- Algo has declined by 10.5% over the last 24 hours.
- Algorand’s active addresses soared by 300%.
Over the past month, Algorand [ALGO] saw a massive uptrend, hitting a high of $0.6133.
However, the last 48 hours have seen the altcoin decline to a low of $0.459. In fact, as of this writing, Algorand was trading at $0.475. This marked a 10.5% decline over the past 24 hours.
Prior to this dip, ALGO was on an upward trajectory hiking by 66.51% on weekly charts and 318.99% on monthly charts.
This surge over the past month is credited to growing adoption and network usage according to IntoTheBlock.
Algo active address soars
In their analysis, IntoTheBlock observed that Algorand’s active addresses have increased by 300% since the 1st of December.
Source: IntoTheBlock
According to them, this uptick in addresses suggests a considerable growth in network activity, which is central to a sustained rally.
As such during this period, active addresses increased from 123.57k to 427.23k. However, at press time, this has seen a moderate decline to settle at 343.79k.
Often a surge in active addresses is essential for price gains, and when the network grows, it helps in facilitating price rallies through demand and not speculation or trends.
Impact on price charts?
As expected, Algorand’s network activity has had a considerable impact on Algo price charts. For instance, when active addresses surged by 300%, the prices reached a recent high.
Consequently, a decline witnessed over the past day directly correlates with a drop in active addresses.
Therefore, AMBCrypto’s analysis indicates that Algo is experiencing a market correction across the charts. Thus, over the past 48 hours, the market has turned bearish with sellers dominating the market.
Source: IntoTheBlock
For example, Algorand’s large holders have sold more than they have bought over the past few days. As such, the holder’s netflow has declined to hit a three month low of -25.34 million Algo tokens.
When large holders sell more, it shows their lack of confidence in the market’s direction.
Source: IntoTheBlock
Additionally, Algorand’s number of large transactions has also declined from 309 to 162. This shows that whale activity has declined with fewer purchases or sells related to large holders.
When whales take a back seat in the market, it shows they are still waiting for the right moment to renter.
Source: Coinglass
Equally, most traders are currently taking short positions. According to Coinglass data, the long/short ratio shows that most investors are going short. This implies that they are betting on prices to decline.
Source: Santiment
Finally, Algo’s DyDx exchange funding rate has turned negative. This implies that the demand for short positions is higher than for longs. Thus, most traders are bearish, and that they are unwilling to pay a premium to hold their trades.
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Simply put, although Algo is currently in a bullish phase, bears are attempting to take control of the market. As such, the sentiment is shifting towards bearish for the short term, at least. This points towards a possible correction.
Therefore, if sellers take the market, Algo will find support around $0.45. Subsequently, if the bulls regain the momentum and retake the market, the next significant resistance is around $0.71.
