After All-Time High, Algorand (ALGO) Attempts To Initiate Another Upward Move

While Algorand (ALGO) has been falling since reaching a new all-time high price, it is still holding on above the previous all-time high area. 

Its reclaim is a very positive development that could lead to another increase. However, ALGO seems to be nearing the top of its long-term upward movement.

New all-time high

ALGO has been moving upwards since breaking out from a descending wedge on Aug 8 (green icon). The breakout indicated that the previous decrease had ended, a new bullish trend began.

The upward movement led to a new all-time high price of $2.55 on Sept 13. While the token has been moving downwards since, the price action is not bearish. 

The main reason for this is the deviation below the $1.77 area (red circle) and its subsequent reclaim. Such deviations are often followed by a significant movement in the other direction. Therefore, if ALGO manages to hold on above this area, it would be expected to move upwards. 

Technical indicators support this possibility, though they provide some ambiguity in their readings.

The MACD, which is created by a combination of short- and long-term moving averages (MA) is falling. This means that the rate of increase of the short-term trend is slower than the long-term one. 

The RSI, which is a momentum indicator, has moved above 50 once more. This is a sign that momentum is higher than average, and often precedes upward movements. The most recent RSI move above 50 transpired on Aug 10, preceding the entire upward movement towards the all-time high.

Chart By TradingView

ALGO wave count

Cryptocurrency trader @Altstreetbet outlined an ALGO chart, stating that the token will complete one final upward movement towards a new all-time high before falling.

Source: Twitter

The wave count indicates that ALGO is in wave five of a bullish impulse. Bullish impulses are trends that are created by three upward movements and two corrective decreases. Therefore, ALGO is in the final portion of its bullish trend. 

Furthermore, the all-time high was reached at a confluence of Fib retracement levels, which often acts as the high, since wave length are usually related to each other.

The high was made at the 1:1 length of waves 1-3 (white). This means that the length of wave five was the same as the length of wave 1 and three combined. Furthermore, it also coincided with the 1.61 external Fib retracement level of wave four (black). 

If the movement extends, the next resistance would be at $3.50, at the 1.61 length of waves 1-3. This would mean that wave five is 1.61 times longer than waves one and three combined.

Chart By TradingView

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