- Algo is down 10.5% in the last 24 hours.
- Algorand’s active addresses surged 300%.
Over the past month, Algorand (ALGO) has seen a huge rise, reaching a high of $0.6133.
However, in the last 48 hours, the altcoin price fell to a low of $0.459. In fact, at the time of writing, Algorand was trading at $0.475. This is a 10.5% decline over the last 24 hours.
Prior to this drop, ALGO was up 66.51% on the weekly chart and 318.99% on the monthly chart.
According to IntoTheBlock, this surge over the past month is due to increased adoption and network usage.
Algo active addresses surge
IntoTheBlock’s analysis shows that Algorand’s active addresses have increased 300% since December 1.
Source: IntoTheBlock
According to them, this increase in addresses suggests a significant increase in network activity, which is key to the ongoing rally.
Therefore, during this period, active addresses increased from 123.57k to 427.23k. However, at press time, this figure had fallen slightly, settling at 343.79k.
Often, surges in active addresses are essential for price increases, and as the network grows, it helps drive price increases through demand rather than speculation or trends.
Does this affect the price chart?
As expected, Algorand’s network activity has had a significant impact on the Algo price chart. For example, a 300% surge in active addresses means the price has reached a recent high.
As a result, the decline seen over the past day is directly correlated to the decline in active addresses.
So, according to AMBCrypto’s analysis, Algo is experiencing a market correction across the charts. So, in the last 48 hours the market has turned bearish with sellers taking control.
Source: IntoTheBlock
For example, large holders of Algorand have sold more than they have bought in the past few days. As a result, the net flow of holders hit a three-month low of -25.34 million Algo tokens.
When large holders sell more, it signals a lack of confidence in the direction of the market.
Source: IntoTheBlock
Additionally, the number of large transactions in Algorand decreased from 309 to 162. This shows that whale activity has decreased due to fewer purchases or sales involving large holders.
Whales taking a back seat in the market shows that they are still waiting for the right moment to lease.
Source: Coinglass
Likewise, most traders are currently in short positions. According to Coinglass data, the long/short ratio shows that most investors are taking short positions. This means they are betting on prices falling.
Source: Santiment
Algo’s DyDx exchange funding rate has finally turned negative. This means that the demand for short positions is higher than for long positions. Therefore, most traders are bearish and are not willing to pay a premium to remain in the trade.
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Simply put, Algo is currently in a bullish phase, but bears are attempting to take over the market. So the mood is shifting to the downside, at least in the short term. This points to a possible fix.
So, if a seller enters the market, Algo will have support of around $0.45. If the bulls then regain momentum and take control of the market again, the next important resistance would be around $0.71.