– Algorand has been one of the best performers of 2020 and 2021 but is at risk of a significant drop.
– Thin Volume Profile warns of a swift and violent drop if the current support range fails.
Algorand (ALGOUSD) Weekly Ichimoku Chart
Above: Algorand (ALGOUSD)
Algorand has easily been one of the most talked-about, and most follow altcoins of the last couple of years. That interest and some of the fundamental data have yielded insane gains in a short period of time. But, as they say, everything that goes up must eventually come down. Algorand had a massive pump yesterday (Thursday, November 18th 2021) when it moved from the open of $1.65 to the daily high of $3.00 – an 81.18% increase. Unfortunately, Algorand ultimately closed higher by only 11.52%, giving up almost all of its gains. The move is what some in the cryptocurrency space call a ‘scam wick.’
The threat of downside pressure is heavy here, especially after many bulls got trapped buying the highs of the day and near the all-time highs. Algorand has been in a dismal consecutive ten-week congestion zone, and it may finally break out, but lower. The most crucial level to watch as Algorand transitions into the weekend is the $1.62 price level. $1.62 is the last bit of strength in the Volume Profile before it becomes skinny. Failure to hold $1.62 would likely create the conditions for Algorand to sell-off to test support between $1.25 and $1.50.
Algorand does remain bullish despite the ‘scam wick’ and overall bearish sentiment in the cryptocurrency market. All conditions required for an Ideal Ichimoku Breakout entry are met save one: the weekly close above the Tenkan-Sen. Once that occurs, then Algorand should have a clear and undisturbed path higher. The current consolidation is likely just a precursor to the next bullish breakout.