Why expecting ALGO to breakout is pretty reasonable
- ALGO gained more than most altcoins in the last seven days.
- The token could rise above $0.1 if the money flow continued in the upward direction.
Lately, many altcoins have been showing hints that the much-anticipated altcoin season could be close. In fact, cryptocurrencies like Toncoin [TON], Cosmos [ATOM], and ImmutableX [IMX] have all had impressive outings in the last few days.
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ALGO: On the brink of revival?
However, Algorand [ALGO] is one altcoin that has been a strange addition to the lot. For reasons, one can point to the disappointing performance ALGO has had all year long. But in the last seven days, the price has increased by 7.28%.
It is even more surprising that crypto educator and analyst IncomeSharks predicted that ALGO could soon flip bullish and breakout of a tight wedge. For ALGO to achieve this upward surge, it needs a significant volume while the trend lines need to close in.
According to IncomeShark, the aforementioned scenario is very possible.
— IncomeSharks (@IncomeSharks) September 21, 2023
Just three months ago, AMBCrypto reported that almost all ALGO holders were holding at a loss. But even though the conditions haven’t significantly changed, this breakout, if achieved, could offer some form of relief.
Also, some on-chain metrics seem to support the projection. To start with, Algorand’s social dominance, which had its seasons of downsides, was back up at 1.025% at press time. Social dominance shows the share of discussions an asset has compared to others in the cryptocurrency market.
Therefore, the increase in ALGO’s social dominance means that the token was trying to equal the level of hype other major altcoins had. Usually, this is a bullish sign for a cryptocurrency. Another metric that backed up IncomeSharks’ perception was the weighted sentiment.
At the time of writing, ALGO’s weighted sentiment was 3.03. This metric measures the positive or negative acumen connected to a token within the social media terrain. When the metric is negative, it means the broader market is bearish on the price.
Bears may not have a say
But in ALGO’s case, the positive value implies that traders are bullish on the token’s short-term performance. From ALGO’s four-hour chart, the Money Flow Index (MFI) had risen to 56.25. The technical indicator reading signifies that ALGO had good buying momentum.
As a leading indicator, the MFI suggests that prices may continue in the upward direction. Indications from the Directional Movement Index (DMI) also seemed to show the same. At the time of writing, the +DMI (green) was 31.13 while the -DMI (red) was 18.68.
Read Algorand’s [ALGO] Price Prediction 2023-2024
This showed that buyers had more presence in the market than sellers. However, ALGO might need the Average Directional Index (ADX) yellow to trend higher as confirmation of a price increase. At press time, the ADX (yellow) was 24.77.
If the indicator reaches 25, or above, then ALGO will rise above $0.1.