The Algorand price jumped by more than 10% on Thursday even as other cryptocurrency prices remained under pressure. ALGO, the native token, rose to $1.76, which was the highest level since December 7th. It has risen by more than 36% from its lowest level this month.
Why did ALGO jump?
Algorand is an Ethereum-killer that gained popularity in 2021 as is token price surged. It is mostly focused on the decentralized finance (DeFi) industry although it has been used in other industries. For example, it is now being used in air monitoring by PlanetWatch. ALGO, its native token is worth more than $10 billion, making it the 18th biggest cryptocurrency in the world.
The Algorand price has moved against the grain today after a big announcement by Algofi. Algofi is the first algorithmic money market and stablecoin built on Algorand’s ecosystem. In a statement, Algofi and the Algorand Foundation said that they will distribute 2 million ALGOs in the first quarter of the year.
The announcement means that Algofi users will earn ALGO rewards when they borrow and lend several cryptocurrencies like ALGO, STBL, and USDC. Other eligible coins will be goBTC and goETH. The CEO of Algofi said:
““The Algofi launch comes at a pivotal moment for the Algorand DeFi ecosystem. Algorand offers a scalable blockchain with no compromises, but they are just now entering the emerging world of DeFi.”
This announcement came at a pivotal time for Algorand’s ecosystem. Recently, Borderless Capital announced a new $500m fund for Algorand projects. That announcement was on top of the $400 million that the funf manages. The fund will invest in all types of platforms in the ecosystem like DeFi and non-fungible tokens.
While Algorand has made a lot of progress, it has a long way to go. For one, competition in the industry is stiff. According to DeFi Llama, there are only two DeFi platforms in its ecosystem that have a total value locked of $102 million. This makes it the 36th biggest platform.
Algorand price prediction
The four-hour chart shows that the Algorand price has made some recovery recently. Along the way, it has risen above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) is tilting upwards.
The coin has also moved above the neckline of the inverted head and shoulders pattern. Therefore, there is a possibility that the bullish trend will continue as bulls target the key resistance at $2.
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