It surely seems to be a lucky Friday for popular Distributed Ledger Technology (DLT) based blockchains – the capital shifted towards Layer-1’s from crypto’s two largest assets, Bitcoin (BTC) & Ethereum (ETH).
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With Stellar (XLM) leading by example, Algorand (ALGO) joined into the double-digit rally for popular Distributed Ledger Technology (DLT) based coins. With the risk-on appetite still very fragile, Bitcoin’s (BTC) drop below $73K on Friday didn’t reflect on a selection of major-caps.
Algorand’s Double-Digit Rally vs. Bearish On-Chain Data
Algorand’s market value jumped by 14%, but the on-chain metrics retain a bearish perspective. Zooming into the one-hour ALGO price charts, what immediately catches the eye is a huge spike on the Money Flow Index (MFI). Normally, figures fluctuating near constitute an overbought condition, while numbers below means the digital asset is oversold.
For this not to turn into a bull trap, Algorand’s (ALGO) price must sustain above $0.118, which coincides with the Red-Label Bollinger Band (BOLL). Some seasoned traders are also drawing parallels to Algorand’s rally back in 2023, which structurally resembles the current ALGO price movement.
Algorand Is Striving For $0.28 After This Identified Pattern
Back then, Algorand’s bounce back rally from the same demand territory ended up in a brief $0.28 resistance reclaim, according to SoSoValue. While historical price data definitely does not guarantee the future, it surely helps understand the potential of an asset during bull cycles.
Now, the circumstances are a whole lot different: with Algorand’s Layer-1 chain recently deemed the most quantum-resistant by Google, Algorand’s chances of reclaiming $0.28 just like three years ago mainly depends on relevance – the more utility major-cap DLTs get in the next bull round, the higher up the rank they end up.
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ALGO is chasing Stellar after a strong 14% rally, fueled by fresh technical breakout talk and renewed interest in utility-focused Layer-1s.
The Money Flow Index (MFI) is hovering near 80, which is bearish. Plus, ALGO is currently trading below the Red-Label Bollinger Band at $0.118 — a level that usually signals caution.
Many traders are pointing out that ALGO is repeating the exact same tight trendline breakout pattern it had in 2023 — right before it went parabolic.
That’s the big debate. The MFI and position below the Red-Label Bollinger Band suggest short-term risk, but the historical pattern repeat is giving bulls hope for a much bigger move.
DailyCoin’s Vibe Check: Which way are you leaning towards after reading this article?
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