Algorand price pulled back to the lowest level since September 20th as investors waited for the upcoming FOMC decision. The ALGO token dropped to a low of $0.3182, which was about 8.2% below the highest point on Tuesday. Its market cap has dropped to over $2.2 billion, making it the 29th biggest cryptocurrency in the world.
Algorand, like other financial assets, has come under intense pressure in the past few weeks as investors focus on the upcoming interest rate decision. Analysts expect that the Federal Reserve will continue hiking interest rates by 0.75%. It will also maintain its quantitative tightening policies in a bid to reduce its balance sheet.
In most cases, cryptocurrency prices drop in a period of high-interest rates. Indeed, other assets like stocks and commodities have all pulled back. The Dow Jones has crashed by more than 20% this year while bond yields have surged to the highest level in years.
Algorand price has also been in a strong bearish trend even as its ecosystem booms. A closer look at the DeFi ecosystem shows that volume has continued rising. The total value locked (TVL) has risen to more than $230 million. This is substantially higher than the YTD low of $27 million. Algofi is a TVL of over $102 million while Folks Finance has a TVL of over $80 million.
Algorand price prediction
The four-hour chart shows that the Algorand price has been in a strong bearish trend in the past few days. It has moved below the important support level at $0.3326, which was the highest point on September 12. The coin has moved below the 38.2% Fibonacci Retracement level while volume has started dropping.
At the same time, ALGO price remains above the 25-period and 50-period moving averages while the Relative Strength Index (RSI) has tilted lower. Therefore, there is a likelihood that Algorand price will likely continue falling as sellers target the key support at $0.30. The stop-loss of this trade will be at $0.33.