The role of the technical assessment when evaluating Algorand (Algo)
The cryptocurrency has recorded a significant increase in value in recent years, with some assets recorded with explosive growth, while others have suffered significant losses. These cryptocurrencies include Algorand (ALGO), an open source platform for distributed LEDGER, which uses a consensus salgorithm for proof-of-stake (POS) to secure its network. In this article, we will examine the role of the technical assessment when evaluating the Algorand market value and discuss how investors can use technical analyzes to inform your investment decisions.
What is Algorand?
Algorand is an open source cryptocurrency that was launched in 2017 by a team of experts from New Zealand. It is designed in such a way that it is quick, safe and energy -efficient, which makes it an attractive option for users who are looking for a reliable digital currency. The platform’s consensus salgus, which is known as Sphincs (Synchronous -Hashed Impression of Consensus), uses a new approach that eliminates the need for the central authorities and makes Algorand a decentralized alternative to traditional blockchain.
Technical evaluation and Algo
The technical assessment plays a crucial role in the evaluation of Algorand’s market value. During the technical analysis, various diagrams and metrics are examined to identify patterns and trends in the price movement. In this context, the technical assessment is used to assess the underlying factors that drive the price behavior of a financial value.
The market capitalization of Algorand (market capitalization) has increased steadily over time and reached a highlight of around 2.5 billion US dollars in December 2020. This represents a significant increase compared to the initial market capitalization of around 100 million US dollars in January 2017. The market value is now more than 25 -larger than the initial market capitalization.
Technical indicators and patterns
Several technical indicators can be used to evaluate the performance of ALGO and identify possible trends or reversal. Some remarkable examples are:
- Moving average values : These are moving average values that compensate for price fluctuations and enable the identification of long -term trends. In the case of Algorand, a 50-day average (MA) is currently $ 2.20, while a 200-day MA is around $ 3.00.
- Relative strength index (RSI)
: This indicator measures the price impulse by comparing the closing course of a financial value over a certain period of time. A measurement of over 70 shows an over -killed state, while under 30 suggests an oversized state. In Algorand’s case, RSI is currently around 25, which points out that the market was in an upward trend.
- Bollinger tapes : These ligaments represent a volatility measure in which the spread between the upper and lower Bollinger ligaments is used to assess the price movement. A narrow volume shows a narrow volatility area, which indicates that the asset is in an upward trend.
reverse pattern
Several reverse patterns can be identified on Algorand diagrams, including:
- Head and shoulder : This pattern consists of three peak, followed by a lower peak, which indicates a potential reversal.
- triangle pattern : A triangular pattern is formed when the price moves in one direction, reversed and then a new higher or lower low -deep and forms.
- Gupy pattern : The guppy pattern is characterized by a long wave that begins at the beginning of an upward trend and ends with a similar movement.
Investment strategies
When evaluating the market value of Algorand, the technical assessment can influence investment strategies in different ways:
- Purchase of signals : Identify potential purchase options if the prices form a head and shoulder or a triangular pattern.
- Sales signals : Search for sales signals if the RSI indicator falls below 30 and the spread Bollinger tapes are wider than usual.
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