Algorand (ALGO) trading volume has soared 130% in 24 hours, pushing the token’s price to $0.40. This surge has brought 38% of holders into unrealized profits.
While this trend could increase the number of profitable holders, on-chain analysis indicates that ALGO price could face a setback.
Interest in Algorand grows, but stakeholders are dropping out
Algorand’s price has risen from $0.33 on January 1, 2025, to $0.40 today (2), marking a strong start to the year. This rally positions the altcoin as one of the best-performing assets among the top 50 cryptocurrencies by market cap.
Meanwhile, trading volume increased from $170.67 million to $468.60 million in the same period. The increase in volume indicates growing interest in the cryptocurrency. The upward trend in both volume and price indicates strong bullish momentum, suggesting that the token’s value could rise further.
While rising volume has driven Algorand’s recent rally, a drop in volume could indicate weakening momentum. However, key metrics now suggest that the price may struggle to sustain its rally in the near term.
Volume by Algorand. Font: Santiment
One metric that aligns with this bias is the net flow of large holders. According to data from IntoTheBlock, net flow, a key metric that measures the balance of buying and selling by addresses holding 0.1% to 1% of Algorand’s circulating supply, has turned negative.
When the net flow of large holders is positive, it indicates that the majority are accumulating more tokens than they are selling. Conversely, a negative reading means distribution, with holders selling more than buying.
This shift indicates that these holders are selling more than buying. If this trend continues, the price of ALGO, currently at $0.40, could face significant downward pressure.
Algorand Large Holders Net Inflow. Source: IntoTheBlock
Price prediction
From an on-chain perspective, the In/Out of Money Around Price (IOMAP) shows that the price of ALGO is less likely to trade higher. IOMAP classified addresses based on those in profit, at breakeven, and others out of the money.
Using this data, it is possible to identify support and resistance. Typically, the higher the volume or addresses, the stronger the support or resistance. At the time of publication, 146,530 addresses hold 48.64 million ALGO in profit, purchased at an average price of $0.40.
But at $0.42, 219,340 addresses hold 333 million ALGO and are out of the money. This indicates that Algorand’s price is facing significant resistance, which could trigger further price declines.
Algorand In/Out of Money Around Price. Fonte: IntoTheBlock
If this continues, ALGO could retreat to $0.35. However, if Algorand’s trading volume increases with intense accumulation, the value could jump to $0.50.
The post Algorand (ALGO) Surges 130% in Volume, but Data Indicates Possible Correction appeared first on BeInCrypto.
