Algorand focus is to solve the blockchain trilemma by offering high transaction throughput, robust security, and true decentralization. Recently, based on its price chart analysis, Algorand has shown signs of a potential bullish surge.
An analyst known as Merlijn The Trader on X, presented a chart to address the technical patterns and predictions for ALGO price movement, particularly focusing on the recent breakout.
ALGO ABC Correction Analysis
The monthly price chart for Algorand price reveals a classic ABC correction pattern:
- A: This phase represents the initial price drop, which began in late 2021. The ALGO price decreased in value during this period.
- B: Following the drop, there was a recovery phase where the price rebounded, creating a peak around mid-2022. This indicates a return of buying interest.
- C: The final leg of the correction saw the price decline again but not to the depth of the A phase, suggesting that the correction might be nearing its end by early 2023. This phase sets up the potential for a price reversal.
Completing this correction pattern on the ALGO price chart hints at the end of a bearish phase, with the possibility of entering a bullish trend.
ALGO price Triple Bottom Formation
Further analysis of the ALGO price chart shows the formation of a triple bottom pattern from late 2022 to early 2023:
- This pattern is characterized by three distinct lows at approximately the same price level, indicating strong support where buying pressure consistently overcomes selling pressure.
- The formation of a triple bottom on the ALGO price chart suggests a robust foundation for a price increase, providing a psychological boost for investors.
This bullish reversal pattern on the ALGO price chart adds to the optimism regarding a potential price surge.
ALGO price Falling Wedge Breakout
The most important signal from the ALGO price chart is the recent breakout from a falling wedge pattern:
- ALGO price action within this period showed lower highs and lower lows, forming a wedge. The price chart indicates this pattern was in play for several months.
- The breakout, visually represented by a green arrow on the price chart, signifies the price moving above the upper trendline of the wedge, a strong bullish indicator.
- Such breakouts typically precede significant price increases, as they release the built-up buying pressure, which is evident from the ALGO price chart.
The breakout from this pattern on the ALGO price chart suggests that a reversal from the downtrend is underway.
The confluence of an ABC correction, a triple bottom, and a falling wedge breakout on the ALGO price chart presents a highly bullish scenario:
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These patterns collectively suggest that ALGO price could be on the verge of a price surge. The “UP ONLY” mentioned by the analyst is supported by the technical analysis observed on the price chart.
Based on the detailed analysis of the ALGO price chart, the ALGO price appears to be setting up for a notable price surge. The target following this breakout could be ambitious, potentially revisiting or surpassing previous highs if the bullish momentum continues. The ALGO price chart analysis provides a bullish outlook soon.
