- Algorand price faces a potential sell-off as the TD Sequential indicator flashed a sell-signal on the 12-hour chart.
- The last two times this setup flashed this sell signal on the same time frame, ALGO price saw a 12%-to-28% correction.
- A bearish thesis invalidation might come into play if ALGO manages to break above the recent high at $1.30.
Algorand price saw a 100% rally in the last three weeks as it hit a local top of $1.30. Now, ALGO could potentially reverse as the Tom DeMark Sequential indicator presented a sell signal on the 12-hour chart.
Algorand price eyes a reversal in trend
Algorand price suggests exhaustion of the bullish momentum as the last 12-hour candle showed a mere 0.75% surge. Following this is the TD Sequential index’s sell-signal presented in the form of a green nine candlestick. This bearish setup forecasts a one-to-four candlestick correction.
Interestingly, ALGO price saw a correction of 27% and 12% the last time this index flashed a sell-signal on January 17 and February 7, respectively. Hence, if something similar was to happen, investors should expect a pullback to the immediate support levels at 78.6% and 61.8% Fibonacci retracement level at $1.12 and $0.97, respectively. These areas of support sit 15% to 25% lower than ALGO’s current price.
ALGO/USDT 12-hour chart
While this does seem bearish for Algorand, investors should note that cryptocurrencies are highly volatile. Hence, a spike in buying pressure due to unforeseen events leading to a close above the recent high at $1.30 on the 12-hour time chart will invalidate the bearish thesis.
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