Key Insights:
- ALGO breaks out from a descending channel, suggesting a bullish trend.
- Open interest is up by 14.97%, indicating growing market confidence.
- Inverse head and shoulders pattern suggest a pump towards $0.22.
Algorand price ($ALGO) has been making significant strides recently, as market analysts have spotted key bullish signals. The breakout from a descending trendline and increasing open interest show strong signs that the altcoin might be primed for a potential price surge. These indicators suggest that the market could see a strong recovery or continuation of its bullish trend soon.
Trendline Breakout Signals Bullish Potential
According to the chart analysis for Algorand, the cryptocurrency has just broken out of a descending channel pattern. This breakout is considered bullish as it usually signals the termination of the downtrend and the onset of an uptrend.
Breakouts from descending channels have historically led to price increases, and traders expect such bullish action in the case of $ALGO.
The breakout followed weeks of consolidation, during which ALGO printed lower highs and lower lows. After breaching the upper boundary of the channel, traders began watching for resistance at the $0.21 to $0.22 range—levels that could determine whether bullish continuation is likely.
Algorand Growing Market Interest
The latest open interest (OI) data confirm the increasing market interest in $ ALGO. Open interest for ALGO has risen by 14.97% over the past 24 hours, indicating that more traders are entering positions.
Rising OI alongside a pattern breakout reinforces the bullish case. Analysts interpret the surge as a signal that market participants are preparing for a possible breakout continuation in the days ahead.
Inverse Head and Shoulders Pattern Suggests a Pump
Market analyst Ted Pillows has also seen ALGO on the head-and-shoulders inverse on the 12-hour chart. This technical formation currently forms a bullish reversal pattern for the $ ALGO, which is viewed as a very strong reversal of the price increase.
The inverse head-and-shoulders pattern is formed from the left shoulder, the head, and the right shoulder. For $ALGO, the price dipped to lows of $0.16 -$0.18 and then began to charge upwards against the neckline resistance at $0.21 – $0.22.
The neckline has been tested several times and is now the key level to watch. A break above the resistance at $0.21–$0.22 can see further surges towards $0.25–$0.30.
A breakout above the neckline should continue the bullish move. As Algorand tests this resistance zone, the chart indicates a minor correction of 6%-8% could occur before a further pump.
M2 Money Supply Correlation for Algorand
One that could add another bullish angle for $ALGO is its correlation with the Global M2 money supply. M2 (measuring the total amount of money in circulation) has been related to price movements of risk assets, including cryptocurrencies.
Furthermore, the chart indicates that $ALGO could replicate the movement of M2 by rising in value as liquid tends to pour into the cryptocurrencies in times of economic expansion. As M2 has increased in the past, it usually increases the prices of assets such as $BTC and altcoins, including $ALGO. As the global M2 money supply continues to rise, $ALGO can benefit if it tracks this macroeconomic pattern and shows further bullish price action.
Now, traders look for confirmation above the resistance from $0.21 – $0.22 to show that the bullish momentum will continue. If $ALGO follows the M2 trend, it could be priced around $0.75 to $0.90 in the next few months.
Disclaimer
In this article, the views and opinions stated by the author or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
