- Algorand price fell 20% amid increasing selling pressure and lower profitability.
- Active addresses increased, but DeFi activity continues to decline.
Algorand (ALGO) price has fallen by more than 20% in the past week, trading at $0.371. This significant drop occurs after SOMETHING It hit a multi-year high of $0.613 earlier this month, marking a marked change in market trends.
Increase in active addresses amid price decline
Despite the bearish trend, Algorand has witnessed a notable increase in active addresses. IntoTheBlock data reveals that active addresses increased from 104,000 to 190,000 in just 24 hours. Similarly, new addresses increased from 24,000 to 95,000 during the same period.
This activity could reflect traders liquidating their holdings to reduce losses or new entrants engaging in speculative trading. If the price continues to fall along with the increase in active addresses, it may indicate increased selling activity and intensify the ongoing downtrend.
Falling profitability fuels bearish sentiment
The profitability of active addresses has fallen to its lowest level in a month, currently standing at 16%, compared to 57% two weeks ago. This sharp drop suggests that many traders who participated during the recent rally are now selling to secure earnings or mitigate losses. The persistent decline in profitability could amplify negative market sentiment and exacerbate selling pressure, causing ALGO price to decline further.
Algorand four-hour chart technical analysis indicates increasing selling pressure. The Chaikin Money Flow (CMF) is currently in the negative zone, reflecting an imbalance where selling activity exceeds buying. Furthermore, the on-balance volume (OBV) is near the lows of the range, pointing to a reduction in trading volume. ALGO is trading within a descending parallel channel, suggesting that bearish trends dominate the market. market.
A break below the channel’s lower trend line could trigger further declines, while a break above the resistance level could signal a possible recovery.
DeFi activity adds to bearish momentum
Total Value Locked (TVL) on Algorand DeFi ecosystem has decreased significantly, going from $245 million to $165 million in just three weeks, according to DeFiLlama. This reduction is aligned with increased selling pressure and falling prices. A rebound in DeFi activity could signal a change in market sentiment, but continued declines in TVL may prolong the current bearish trend.
Traders and investors should closely monitor these factors as they could play a pivotal role in determining Algorand’s next price movement. With no signs of recovery in DeFi activity or profitability, ALGO’s bearish trajectory could persist.
