DeFi platform Algorand has been in the news lately for several reasons but the price has been unable to shake off its bearish woes amid Bitcoin retracements. However, the outlook could change soon, with ALGO eyeing a breakout from a bullish pattern.
Alogrand kickstarted May on a bright note despite price fluctuations in the broader market. The project became an official blockchain platform and a regional sponsor of the Qatar 2022 FIFA World Cup in North America and Europe. As part of the deal, Algorand will assist FIFA in its digital asset strategy while the governing body FIFA will provide the project with sponsorship assets including advertising, media exposure, and promotional opportunities.
Heading towards mid-May, the Wormhole bridge added support for Algorand, marking its 10th integration with a layer 1 blockchain. Alogrand developers said that the deal played was ‘great news for builders’ as it allowed them to access liquidity outside of the network, significantly boosting its TVL.
More recently, blockchain services firm Koibanx collaborated with Developing Africa Growth to develop Nigeria’s official platform for the commercialization of all intellectual property (IP) on the Algorand blockchain. It was also revealed that Anthony Scaramucci, founder of investment firm SkyBridge Capital, had also taken a significant stake in the project.
One would assume that Algorand partnerships would have a positive impact on its price, right? Well, it’s slightly more complicated than that.
Bitcoin’s largest retracement in 2022 occurred a few weeks ago and most alts, including ALGO, were forced to follow the broader market trend and slip lower on the chart. However, even after discounting the period between 8-12 May, the situation was still grim.
Algorand’s price has declined by as much as 23% since last week and the candles continue to trade below their near-term Moving Averages (20, 50-SMA), outlining its bearish troubles. The On Balance Volume’s downtrend hinted that broader market worries may have cautioned traders from taking up buy orders despite positive news developments.
Outlook switching hands
With that said, the outlook was beginning to change on Wednesday morning. Buy orders were beginning to rise on exchanges and there seemed to be minimal resistance from sellers.
Furthermore, a falling wedge pattern was active on the lesser timeframe and an upwards breakout was likely to develop should buy trades continue to pour in. To trade for a breakout, buy orders can be placed at $0.455 and take-profit at $0.508. A stop-loss can be kept at $0.38. The trade setup carried a 0.71 risk/reward ratio.