Algorand (ALGO) Defies Gravity as Demand for ALGO Staking Rises

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Updated: May 8, 2022, 13:58 GMT+00:00

Algorand (ALGO) recovers from early losses in what has been a trend-bucking week, with demand for ALGO on the rise as the APR rises on Algofi.

Key Insights:

It was a bullish morning session, with ALGO bucking a bearish broader crypto market trend.
Algorand (ALGO) rallied by 7.39% on Saturday, following a 9.93% Friday breakout.
ALGO’s technical indicators are bullish, with ALGO sitting above the 50-day EMA.

On Saturday, Algorand (ALGO) rose by 7.39%. Following a 9.93% rally on Friday, ALGO ended the day at $0.7488.

The upside came despite the broader crypto market seeing deep red, with the total crypto market cap falling by $53 billion over the two days.

Negative market sentiment towards inflation and Fed monetary policy sank riskier assets on Thursday.

On Thursday, ALGO slid by 11.32% before finding support.

Algorand (ALGO) Sees Strong Staking Demand to Deliver Price Support

According to Defi Llama, Algorand’s total value locked (TVL) is up 7.22% to $187.36 million, with Algofi’s dominance at 61.22%.

Algofi is a DeFi platform on the Algorand blockchain. Users can lend ALGO on the Algofi protocol to earn ALGO. At the time of writing, the Supply APR on Algofi stood at 1.62%, up 1.88% on the day, ranking second to USD Coin (USDC), which had a Supply APR of 4.56%.

Early in the week, Algorand hit the news for an altogether different reason. On Monday, FIFA announced Algorand as an official partner ahead of this year’s FIFA World Cup in Qatar.

In response, ALGO rallied for three consecutive days to strike a high of $0.7408 before Thursday’s sell-off.

ALGO Price Action

At the time of writing, ALGO was up by 1.82% to $0.7624. A mixed start to the day saw ALGO slide to a morning low of $0.7075 before striking a high of $0.7842.

A move through to $0.85 would bring $1.00 into play.

Technical Indicators

ALGO will need to avoid the day’s $0.7319 pivot to target the First Major Resistance Level at $0.7916. ALGO would need broader market support to breakout from this morning’s high of $0.7842.

In the event of an extended rally, ALGO could test the Second Major Resistance Level at $0.8347 and resistance at $0.85. The Third Major Resistance Level sits at $0.9371.

A fall through the pivot would bring the First Major Support Level at $0.6891 into play. Barring an extended sell-off, ALGO should avoid sub-$0.65. The Second Major Support Level sits at $0.6292.

Avoiding the pivot would support another breakout session.

Looking at the EMAs and the 4-hourly candlestick chart (below), the signal is bullish. ALGO sits above the 200-day EMA, currently at $0.7190. This morning, we saw the 50-day EMA converge on the 100-day EMA. The 100-day EMA narrowed to the 200-day EMA; ALGO price positive.

A bullish cross of the 50-day EMA through the 100-day EMA would support a run at $1.00.

A bullish cross of the 50-day EMA through the 100-day EMA would support a run at $1.00.

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.