The Algorand price broke out from its trading range after consolidating for more than two months. Due to the strength of the breakout, it is possible that the upward move will continue for a prolonged period of time.
On November 25, the Algorand Foundation announced the availability of a protocol upgrade that expands its range and allows for more processes to be built on the native platform. This improved protocol allows for atomic transfers and asset creation with the aim of leveraging the security and scalability of the updated protocol.
While we cannot be certain that this positive news was the catalyst, the Algorand price saw a surge of more than 30% on November 28. Cryptocurrency enthusiast @AltcoinSherpa noted this massive bullish daily candlestick for the price of ALGO.
$ALGO #algorand $ALTS: INSANE daily candle, this one seemed likely given the other #IEO coins pumping hard. 1 Thing I’ve learned is to trade certain classes of coins during these times. A buy around 3700 sats would be extremely decent. Low VPVR resistance above, ALGO can run… pic.twitter.com/81zvXUJSnW
— Altcoin Sherpa (@AltcoinSherpa) November 28, 2019
In case of a retracement, the tweet suggests that the 370 satoshi area offers a great opportunity for entering the market.
Let’s take a closer look at the price movement and decide where the price is heading to next.
The ALGO price had been trading in a range between 2200 and 3300 satoshis throughout September-November.
The price broke out from this range on November 28. It is currently near the resistance area of 400 satoshis. The same area provided resistance on September 6, pushing the price downward.
A breakout the full height of the pattern would take the ALGO price to 440 satoshis, inside another minor resistance area.
Looking at lower time-frames, we can see the absolutely massive levels of volume on the breakout. This is akin to the initiation of an extended upward move.
While there is some bearish divergence, it is only visible in lower time-frames. However, while it allows for a decrease towards 3700 satoshis, as stated in the tweet, it is not sufficient in predicting a breakdown.
On the contrary, the very strong breakout suggests that the ALGO price will likely not retrace all the way to pre-breakout levels but will make a higher low and resume its upward movement.
In the future, the ALGO price seems likely to increase towards at least 5100 satoshis, which is the 0.5 fib level of the preceding downward move and possibly higher.
To conclude, the ALGO price broke out from its previous trading range. It has likely begun an upward move and will soon increase above the resistance area at 400 satoshis and flip it as support.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of Shutterstock, TradingView, Twitter.
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