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Algorand, a leading Layer-1 blockchain network, has experienced a sharp decline, dropping to $0.3, down 53% from its peak in December. This drop is mainly attributed to a weakening sentiment in the broader crypto market. The Crypto Fear and Greed Index, which was above 90 in early 2024, signaling extreme greed, has now fallen to a fear level of 35.
Similarly, most altcoins are facing struggles, as reflected in the Altcoin Season Index, which has dropped to 44. This overall downturn has affected the Algorand ecosystem as well, with investors staying on the sidelines. The total value locked in Algorand’s decentralized finance (DeFi) ecosystem has decreased from a high of $244 million in December to just $114 million today. In terms of ALGO tokens, this represents a drop from last year’s peak of 1.73 billion ALGO to only 412 million today.
However, there is some positive news for the network. Nansen data shows that Algorand’s active addresses have increased by 27% over the past 30 days, with over 2.5 million active addresses. The number of transactions has risen by 8.5%, reaching 44.9 million. Despite this, total fees collected over the past 30 days have declined by 7.9%, down to $52,300.
In terms of price action, the weekly chart shows that ALGO has been in a nearly three-year consolidation phase, trading between the support levels of $0.0931 and $0.3360. This period has formed a triple-bottom pattern, with the neckline at $0.3360, which is considered a strong bullish signal in technical analysis.
Currently, Algorand has developed a small falling wedge pattern and has retested the support at $0.3360. A wedge pattern typically signals an upcoming strong bullish breakout, and this formation aligns with the second wave of the Elliott Wave pattern. As the coin enters the third phase of the Elliott Wave cycle, which is generally the longest and strongest, it is likely to rebound. If this scenario plays out, the next target to watch will be $1.4571, which represents the 50% Fibonacci retracement level, offering a potential 400% gain from the current price. However, a drop below the $0.20 support level would invalidate this bullish outlook.
