Algorand Price is at Risk as Network Fees Retreat
- $ALGO price has made a strong comeback in the past few days.
- Algorand's total value locked (TVL) has jumped in ALGO terms.
- The number of Algorand developers and code commits have eased.
Algorand price has been rising moderately in the past few days as cryptocurrencies continue outperforming stocks and commodities. ALGO was trading at $0.2150, which was much higher than last week’s low of $0.1830.
DeFi TVL rising
Algorand’s ecosystem seems to be doing well even as the financial market continues seeing its biggest risks in years. The current crisis is mostly because of the crisis in the banking sector. Last week, we saw the collapse of key companies like Silicon Valley Bank (SVB) and Signature Bank.
And this week, First Republic Bank came on the verge of collapsing until the biggest banks in the US decided to deposit $30 billion in the company. Credit Suisse, the $700 billion bank, received funding from Swiss regulators.
Data compiled by DeFi Llama shows that the total value locked (TVL) in Algorand stands at $146 million. In dollar terms, this is significantly below the all-time high of almost $190 million. However, in ALGO terms, the platform’s TVL stands at A696 million, which is slightly below its all-time high of A800 million.
Read more: How to buy Algorand.
Data shows that most DeFi protocols in Algorand have seen inflows in the past few days. Algofi’s TVL has risen by 12% in the past 7 days. Similarly, DeFi platforms like Folks Finance, Lofty, Pact, and Tinyman have done well.
However, other parts of the ecosystem are not doing well. For example, the number of active developers in the ecosystem has dropped by 11% in the past 30 days to just 32. Similarly, the amount of fees generated by the ecosystem has fallen by 22% to just $6.48k. Therefore, these numbers show that there are concerns about the ecosystem, as shown below.
The next key catalyst for ALGO price is the upcoming interest rate decision by the Federal Reserve. In it, the bank is expected to continue hiking interest rates even as risks in the market continues.
Algorand price prediction
The 4H chart shows that the ALGO crypto price made a double-top pattern at $0.30 a few weeks ago. This explains why the coin plunged by over 39% between February 8 and March 11. Now, it has made a slow comeback and stands slightly above the 23.6% Fibonacci Retracement level. It also seems like it is forming a double-top pattern.
Therefore, Algorand's price will likely have a bearish breakout as sellers target the key support at $0.20 The stop-loss of this trade will be at $0.2225.