ALGO coin, the native token of the Algorand blockchain, has been trending on the popular crypto trading platform Lunar Crash over the past day. This increased interest comes alongside a modest price increase of around 3% that brought ALGO to just over $0.11. However, when analyzing the longer-term price chart, ALGO appears to be trading in a descending triangle pattern that typically resolves with a strong breakout.
The descending triangle pattern is created by a series of lower highs and a flat support trendline, which currently sits around $0.09 for ALGO. This is generally considered a bearish continuation pattern, as descending triangles usually break to the downside in the direction of the prior downtrend. ALGO has been in a downtrend for the past several weeks, so traders will be watching for a breakdown below support around $0.09 to indicate a likely continuation lower.
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The widest part of the triangle spans from around $0.14 down to the support around $0.09, so the expected target for a breakdown would be a move roughly equivalent to that distance, taking ALGO down towards $0.05. Traders typically enter short positions on a breakdown below support with increased volume.
However, until a clear break of either support or resistance occurs, the next direction is unclear. Momentum indicators like the MACD and RSI show a mixed picture right now (MACD Line is above MACD Signal Line (Bullish) but RSI ~ 50 ), further confirming the indecision in the market.
Key levels to watch will be the descending triangle support around $0.09 and resistance around $0.14. A break above resistance could signal a trend reversal, while a breakdown below support would point to lower prices ahead. Active traders will look to enter positions on whichever side the breakout occurs.
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