When a cryptocurrency makes a name for itself in the market, it is usually due to positive price movements. However, ALGO seems to have resisted this story.
Instead of making investors optimistic, ALGO made them suffer losses. Upon closer inspection, ALGO’s downtrend does not appear to be over yet.
ALGO catastrophic decline
This altcoin has been sliding across the charts since September, unlike other cryptocurrencies, ALGO failed to recover in November and instead consolidated.
In December and January 2022, the price was deep in losses. In addition, the market events in 2 months have made the situation for ALGO even worse. At the time of writing, the price is 78% lower than ATH.
Currently trading at $0.76, it looks like ALGO is really preparing to disappoint investors further. Considering the price action, all indicators are pointing towards more red candles.
Parabolic SAR white dots are about to flip positions to stay above the candle. The ADX’s bullish strength is also supporting the downtrend as it is about to break through the 25 level.
Price promotion ALGO | Source: TradingView
Additionally, ALGO is in a positive bearish squeeze, suggesting a drop is imminent.
This could see ALGO slip towards the next key support at $0.68, 11.36% below the current price.
Investor behavior and current network data are also unimpressive.
On-chain transaction volume decreased significantly. Most investors are currently not motivated to act because they see no chance of recovery. Also, the size of this group is not small.
ALGO Trading Volume | Source: Intotheblock
99% of ALGO investors face losses at current prices after periods of gains, which equates to 10.1 million holders. Because of this, on-chain activity dropped dramatically.
ALGO investors lose money | Source: Intotheblock
This is also reflected on the DeFi front, where the credit log fell from $19.44 billion to just $11.63 in 5 months.
For most investors who are losing money, it would not be surprising to see them sitting idle for the next few days/weeks as the price falls again.
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Minh Anh
According to AMBCrypto
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