Place chart

Algorand: These support levels are a good place to look for buying opportunities

Warning: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.

Algorand has posted gains of nearly 20% over the past five days. The charts showed that there was some resistance to be found at $0.93, $1 and $1.1 based on an analysis of the higher timeframes.

On the hourly chart, the price might be slightly overextended, and so waiting for a pullback before buying ALGO might be the way to go over the next few hours. Bitcoin also broke above the $42,000 mark and likely impacted market sentiment.

ALGO-1H

Source: ALGO/USDT on TradingView

The $0.895 represents the previous highs recorded in the month of March. This monthly high was breached in the past few hours and the price faced a temporary rejection in a longer-term supply zone in the $0.92-$0.93 area.

On longer timeframes, breaking above $0.895 is, in itself, a strong sign of bullish intention. Now, this should all follow longer timeframes if ALGO records a higher low before pushing higher again.

Where could this low and this high be? To the north, $0.93 and $1 represent critical resistance levels. To the south, $0.895 and $0.873 are important support levels over the next two days.

Reasoning

Algorand broke month highs and tested a supply zone

Source: ALGO/USDT on TradingView

Over the past week, the Awesome Oscillator made lower highs even as the price rose from $0.81 to $0.85. This bearish divergence was followed by a retest of support and an upward impulse move.

In the coming days, market participants should beware of a similar scenario of bearish divergence and retesting of support. Such a series of events could be used to look for opportunities to enter long positions.

CMF remained above +0.05 and CVD remained green for the past few days. This showed that demand has been good lately.

Conclusion

A pullback was not impossible, and the aforementioned support levels are a good place to look for buying opportunities. Until the break of $0.81, a bullish outlook for Algorand in the short term was valid.