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ALGO Activity Increases: Can Traders Capitalize on Algorand’s Rally?
Algorand’s (ALGO) market activity has seen a significant increase, which may indicate that traders are positioning themselves for a potential turnaround. The Chaikin Money Flow (CMF) chart indicates a growing bearish momentum, with the indicator currently situated in the negative zone, suggesting that selling pressure exceeds buying pressure.
Furthermore, the on-balance volume (OBV) is hovering near its lower boundary, implying decreased trading volumes. ALGO’s price action is confined within a descending parallel channel, which suggests that bears are dominating the market. A breakdown below the lower trend line could lead to further declines, while a breakout above the resistance level might signal a potential reversal.
DeFi Activity Contributes to Bearish Momentum
The total value locked (TVL) in Algorand’s DeFi ecosystem has significantly decreased from $245 million to $165 million over the past three weeks, according to DeFi Llama. This decline mirrors the increased selling pressure and falling prices.
An increase in DeFi activity could signal a change in market sentiment and potentially indicate a reversal, but further decreases in TVL may prolong the current bearish trend.
Traders should closely monitor these indicators as they can play a crucial role in determining Algorand’s next price movement. Without signs of recovery in DeFi activity or profitability, ALGO’s base trend is likely to continue.
Source: www.crypto-news-flash.com
