Algorand (ALGO) Rallies on One-Month Volume Peak
Algorand (ALGO) was the day’s outlier, breaking out from one-month lows. ALGO rose on sudden peak volumes not seen in the entire previous month. The immediate news is that the Algorand blockchain will become a sponsor and technica advisor to the World Cup for Men. The project will offer undisclosed support to third-tier regional championships, while advising FIFA on building a platform for NFT assets.
The size of participation was not disclosed, but at least the news attracted attention to the now almost forgotten Algorand. The asset’s move created hopes for an extended rally after the prolonged slide.
Algorand is also viewed as a potential competitor to Ethereum, if it manages to gain the attention of builders.
As May enters a new phase for the crypto market, it was again the altcoins that staged a bigger recovery. ALGO added more than 14% in a single day, up to $0.67. The past 12 month carried a net loss of nearly 50% for ALGO, and the asset is still far from the peak above $2.30.
What Blocked the Growth of ALGO
ALGO was one of the assets potentially seen as commanding three-digit prices and becoming a major network. However, that niche seemed to be taken by Avalanche (AVAX). ALGO, despite its wide exchange representation, failed to take off in terms of apps and adoption. At this point, ALGO stands in the middle of its range, still far from lows around $0.20. Since its launch, ALGO was mostly volatile, not reaching a more significant landmark. Some of the most bullish expectations for ALGO saw it trade above $10.
Unfortunately, ALGO launched at the end of 2019 and was hurt by the bear market in the spring of 2020. After that, the network failed to attract as many apps.
Algorand was one of the high-profile ICOs, successful despite the bear market in 2018 and 2019. The project raised more than $122M at a price of $0.67 per ALGO, with almost no actual returns by the current moment. Algorand overpromised to compete with Ethereum, and was immediately listed to major exchanges, similar to Internet Computer (ICP) and other high-profile assets.
Algorand only locks in a reported $167M in value, based on DeFi Llama data. This is just a fraction of what Terra, Solana and Binance Coin carry. The Algofi project has a 60% dominance, and is essentially the one project accruing deposits and driving the value of DeFi on the platform.
Algorand Goes for Stablecoin Issue
Similar to other projects, Algorant wants to jump-start its value by adding a native algorithmic stablecoin, TAU. Creating such an asset can then boost the value of ALGO, and draw renewed attention. However, those stablecoins are also highly risky and may not work as well with more volatile underlying assets.
In the case of Waves (WAVES), the native stablecoin, Neutrino USD, lost its value to a low of $0.69 and needed an intervention to get closer to the $1 peg.
Will the ALGO Rally Last
The ALGO rally happened at a time when Bitcoin (BTC) dipped under $38,000 again. Sentiment has turned to more bearish moves, potentially ending the fragile rallies of altcoins.
The use case for Algorand may be sound, but the demand for platforms is somewhat diminished. The slide in NFT sales and resales, as well as the shrinking of DeFi mean Algorand may not have its season in the coming months.
The Algorand network already carries well-developed distributed apps, though with smaller value turnover. Almost no play-to-earn games have picked Algorand, despite its promises for a fast network. However, Algorand may start to attract activity and still survive even in the case of a bear market.
Active addresses are also falling, suggesting low usage. After a peak above 1.7M active wallets in December 2021, the event turned out to be an anomaly. In May 2022, the network saw only 29,000 active addresses. The Algorand network claims to carry 17M transactions per month, though uncertain what type of value those transactions carry.
How High Can ALGO Go
Previous price predictions saw ALGO climb to $3 in 2022. With that level still far, ALGO has not seen additional predictions of a bigger rally.
The strength of ALGO is its presence on Binance and Coinbase, opening the asset to risk for international traders. Still, ALGO lagged behind LUNA, which was in the price range under $10 yet managed to build more significant momentum and turn into one of the crypto engines of growth. Even a partial repetition of the LUNA model may help ALGO break out higher.
Algorand also recently invested in an ALGO-BTC bridge built by Flare, possibly increasing the value locked with inflows of the more scarce BTC.
eToro is one of the easiest places to buy crypto and a recognised brand in the financial industry. You can also follow and copy the most successful traders on the site! A great site for beginners.
Uphold makes buying crypto with popular currencies like USD, EUR and GBP very simple with its convenient options to swap between crypto, fiat, equities, and precious metals.
With over 50 coins and an obsession with security, Kraken is one of the safest places to buy and trade crypto.
eToro is a social trading platform that allows you to buy into cryptocurrencies, international stocks and shares and more complex financial assets. It also has an innovative Copy Trader feature where you can choose to follow other successful traders and automatically copy their trades to hopefully share in their success
Kraken has a good reputation for security and protection of your funds and operates across the USA (except NY), Canada, the EU and Japan
Based in Charleston, South Carolina. Serves over 184 countries and has done over $4 billion in transactions. Offers convenient options to swap between crypto, fiat, equities, and precious metals.
Learn how to keep your crypto secure and the different types of wallets you can use.
What are the most common scam coins and how much have they got away with in the past, plus some tips on how to avoid these scam coins.
Solana is a cryptocurrency project with a radically different approach to how blockchains work. It focuses on an element which is very simple: time. It seems introducing a decentralised clock to a cryptocurrency blockchain makes it more efficient than anyone could have possibly imagined. Solana is a high-performance cryptocurrency blockchain which supports smart contracts and decentralised applications. It uses proof of stake consensus mechanism with a low barrier to entry along with timestamped transactions to maximise efficiency.
This is a specific digital coin running on a series of servers. XRP promises utility in handling cross-border transactions to compete with the SWIFT interbank payment system. Being controlled by banks, many question if it is a true cryptocurrency.