Will Algorand break out of this demand zone push it past $1?

Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice

In the last 24 hours saw a transaction volume $140 million on the Algorand network the previous day, according to data on Messari.io. While this figure has risen in recent days, it also contrasted sharply with the $11.3 billion in trades on Ethereum and ETH. Coinglass Data showed that ALGO has seen a slight rise in open interest on futures in the past 24 hours, implying that if $0.988 could be broken, the market would notice and follow the bullish momentum.

ALGO-1H

Source: ALGO/USDT on TradingView

In the near term, ALGO has exhibited a bullish bias on the price charts. In the past week, it climbed above the former monthly (March) highs at $0.895, and this level has served as a support for the past few days. There is also the $0.92 (cyan box) area that used to be a resistance zone.

At the time of writing, it appeared to have flipped to support. Taking advantage of the swing low and swing high at $0.8 and $0.988, Fibonacci retracement levels (yellow) were plotted. Above $0.988, the $1 and $1.03 levels may act as take profit levels.

There were indications that buying pressure had eased in recent hours. This could cause ALGO to retreat towards $0.87-$0.89.

rode

Source: ALGO/USDT on TradingView

The hourly RSI was above the neutral 50 and has not yet shown bearish divergence. Something was wrong with the OBV. While not an anomaly in and of itself, the OBV has formed lower lows in recent days. This meant that the sales volume increased even as the price went higher.

The Directional Movement Index showed a strong upward trend as both the ADX (yellow) and +DI (green) were above the 20 value.

Conclusion

Momentum favored the bulls and the price action also showed that Algorand had climbed past a former resistance zone. However, the hiccups that the OBV appeared to be exhibiting meant that ALGO could also see a relapse over the next few hours.

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