- Algorand saw a breakout beyond a one-month range
- The lack of spot bidding after the breakout may be a sign of weakness on the part of the bulls.
Algorand (ALGO) managed to break out of its month-old formation. It followed in the footsteps of Bitcoin (BTC), which saw a sharp decline to $99.7k on Monday. Hours later, it recovered to reach $108,000, before falling to $101.2,000 – all within 32 hours.
Source: ALGO/USDT on TradingView
Short-term BTC volatility has seen ALGO hovering just above range highs at $0.42. OBV did not make a new high and trading volume only increased slightly over the past week. Can Algorand investors expect a strong rally after the breakout?
Algorand’s TVL is accelerating, but is it enough?
Source: DéfiLlama
At the time of writing, the Layer 1 chain had a total value locked (TVL) of $164.55 million. The data showed that TVL more than doubled from the $70 million level reached in October 2024. This increase was accompanied by higher prices, which could have increased visibility and incentivized participants to the action.
However, over the last two years, the number of core developers has fallen from 39 to just 5. Sometimes this is how the cookie crumbles. A decline in innovation and a reduction in development activities can also negatively impact the ecosystem and community engagement, which can lead to a reduction in user activity.
Source: DéfiLlama
A TVL comparison of ALGO and industry leaders found that it had just 0.13% of the industry-wide TVL.
Algorand has never been a major player in DeFi and has failed to make gains in this sector in recent months. Meanwhile, Solana (SOL) has gained ground on Ethereum (ETH).
Source: MobChart
In terms of price action, new buy limit orders were issued at $0.42 and $0.39. These were the closest support levels with large limit orders clustered around them.
The $0.37 and $0.33 levels further south would be the next targets, should Algorand fall below $0.39.
Source: Coinalyse
However, this seemed unlikely. The 3-day price chart depicts the strong support that the range highs at $0.42 would likely serve. Additionally, the volatility of the past 24 hours has pushed liquidity around the high end of the range.
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Finally, Coinalyze data highlighted the downward trend in Open Interest and Spot CVD over the past 24 hours. This lack of bidding in the spot and derivatives markets may be a concern for bulls.
