Algorand price remains under intense pressure after crashing by over 90% from its all-time high to the current $0.2585. Its market cap has crashed from over $12 billion at its peak to the current $2.1 billion. This article explores why the ALGO token price has crashed and why a rebound is likely.
Algorand ecosystem woes
Algorand is a top layer-1 network that aims to be the best alternative to Ethereum and Solana. Its main advantages are the fact that it has never had a downtime, has high speeds, and low transaction costs.
Algorand emerged during the 2021 crypto boom and its market cap surged, which made it a top-ten coin. Its valuation also jumped as more crypto investors sought for more environmentally friendly alternatives to Ethereum.
Since then, however, Ethereum’s ecosystem has grown, with its decentralized finance (DeFi) assets surging to over $70 billion.
Algorand, on the other hand, has struggled to attract a critical mass of developers to its ecosystem. It only has $111 million in total value locked, with most large players in its ecosystem having a small market share.
Folks Finance, the biggest player in the ecosystem has $177 million in staked assets. Lofty, Reti Pooling, Tinyman, Vestas Equity, and Messina follow it. Algorand has not attracted major developers like AAVE, Uniswap, and PancakeSwap.
As a result, it has been passed by newer blockchain networks like Berachain, Base, Arbitrum, Sui, Aptos, and Sonic are doing much better than Algorand
Many Algorand activities have not thrived. For example, Algorand inked a deal with FIFA ahead of the last World Cup. It is still the blockchain of choice for the world’s football regulatory agency. While that deal was a big deal, its input to Algorand ecosystem has not been all that big. Algorand had NFT sales of about $846,000 in the last 30 days.
Algorand recently launched its staking feature, but data shows only a handful of investors have moved their assets there. ALGO has a staking yield of about 5.9% and a staking market cap of $356 million, representing about 16% of the total assets.
Read more: Algorand outlook: over 90% of ALGO holders at loss amidst stalling prices
Algorand price prediction
ALGO chart by TradingView
While ALGO’s fundamentals are fairly weak, its strong technicals suggest that the token will bounce back. The weekly chart shows that the ALGO token formed a strong bottom at $0.090, where it struggled to drop below since 2023. This price was at its double-bottom level.
It broke out above the neckline at $0.3233 and has now retested it recently. A break and retest pattern is one of the most bullish signs in the market. It has also formed a falling wedge chart pattern, a popular bullish sign in the market.
Algorand price has moved to the second phase of the Elliot Wave pattern. This wave is usually followed by the bullish third phase, which is the longest.
Therefore, a strong bullish breakout will likely push the Algorand price much higher, potentially to the resistance level at $1.4645, the 50% retracement point, which is about 480% above the current level.
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