Algorand (ALGO) Scrambles For Support After Breakdown From 791-Day Support Line

Algorand (ALGO) made a failed attempt at initiating a bullish trend reversal on June 15 and created a long upper wick.

Algorand has been falling since reaching an all-time high price of $2.99 on Nov. 18, 2021. The downward move has so far led to a low of $0.27 on June 15, 2022. This amounted to a decrease of 89% measuring from the all-time high. 

More importantly, the price broke down from the $0.70 horizontal area at the beginning of April. It then validated the area as resistance (red icon) and broke down from a long-term ascending support line by the end of the month. Prior to the breakdown, the line had been in place for 791 days. 

If the downward movement continues, the closest support area would be found at $0.20.

ALGO decreases gradually

ALGO enthusiast @Crypt0forchange tweeted an ALGO chart, stating that despite the slight bounce, the daily candlestick is shaping up to be bearish.

In the daily time frame, the price has been decreasing gradually since May 12. It’s possible that the decrease has been contained inside a descending parallel channel. 

While ALGO attempted to initiate an upward movement on June 15, but was rejected by both the resistance line of the channel (red icon) and the $0.36 horizontal area, creating a long upper wick in the process. This is a bearish sign, since the $0.36 area is now expected to act as resistance. 

Furthermore, the RSI is below 50 and has not generated any sort of bullish divergence.

So, it’s possible that the price will continue falling towards the previously outlined $0.20 horizontal area. 

A breakdown from the current descending parallel channel would confirm this possibility.

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