Algorand price remains in a consolidation mode as the cryptocurrency winter continues. The ALGO token is trading at $0.4180, which is about 20% below the highest point last week. It has fallen by more than 84% from its all-time high. A closer look shows that the coin’s performance is in line with that of other cryptocurrencies like Cardano and Avalanche.
Algorand has been in a strong bearish trend for months even as its ecosystem growth continues. There are several reasons why this sell-off has intensified. First, there is a sense in which most digital currencies became significantly overvalued during last year’s rally. Second, the ongoing hawkish turn by major central banks like the Federal Reserve and the ECB has pushed people away from risky assets.
Third, the Algorand price has declined because of the changing fiscal policy. In the past two years, the American government unleashed stimulus worth trillions of dollars. With Algorand and other cryptocurrencies rising, many people reinvested this cash in them. The government has now ended most of the existing stimulus packages.
Most importantly, there are now systemic risks in the industry after the recent crash of Terra’s ecosystem. While Algorand is not directly exposed, many investors exited their holdings fearing contagion risks. At the same time, Algorand has faced significant competition from the likes of Avalanche, Solana, and Tron.
Algorand price prediction
The ALGO crypto price has been in a steep collapse in the past few months. It crashed to a low of $0.3385 after the LUNA crash. And now, its attempts to back found a strong resistance at $0.5056. The coin’s price has been supported by the 25-day and 50-day moving averages. It also remains below the important resistance level at $0.6723.
Therefore, the coin will likely keep falling as demand for the coin remains elusive. If this happens, the next key support level will be at $0.3445. A move above the resistance at $0.5086 will invalidate the bearish view.