Algorand (ALGO) plunged 20%, can the market stop falling and rebound?

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As of press time, the price of Algorand (ALGO) has fallen by more than 20% in the past seven days and is currently trading at $0.371. ALGO previously rallied to multi-year highs of $0.613 at the beginning of the month, but the current bearish trend appears to be in reversal.

Despite the price drop, the number of active addresses has increased significantly. According to data from IntoTheBlock, active addresses surged from 104,000 to 190,000 in just 24 hours, while the number of new addresses also increased from 24,000 to 95,000. This suggests that while prices have fallen, market participation has increased, possibly reflecting traders trying to cut losses by selling, as well as new traders joining in on the speculation.

However, the profitability of active addresses has dropped significantly, falling to 16% from 57% two weeks ago. This could mean early investors are taking profits and adding to selling pressure on the market. If profitability continues to decline, it could exacerbate bearish sentiment, causing prices to fall further.

Technically, Algorand’s four-hour chart shows increased selling activity, with Chaikin Money Flow (CMF) in negative territory, indicating heavy selling pressure. At the same time, the on-balance volume (OBV) indicator is also fluctuating at lows, with trading volume declining and the price falling into a downward channel. A break below the channel's lower rail could intensify downward pressure.

Additionally, the decline in DeFi activity further exacerbated the downward trend. According to DeFiLlama data, Algorand’s total value locked (TVL) dropped from $245 million to $165 million. This change coincided with selling activity, causing the price to fall.

Nod your head to live and watch the live broadcast to catch the bull market!