Algorand (ALGO) trading volume has increased 130% in the past 24 hours, pushing the Token price up to $0.40. This recovery has delivered unrealized profits to 38% of ALGO owners.
While this trend could increase the number of profitable investors, chain analysis indicates that ALGO’s price could hit a roadblock.
Interest in Algorand is rising, but investors are selling
Algorand’s price increased from $0.33 on January 1, 2025 to $0.40 today, marking a strong start to the new year. This breakout puts ALGO among the best-performing assets among the top 50 cryptocurrencies.
This increase simultaneously caused Algorand’s trading volume to increase from 170.67 million USD to 468.60 million USD during the same period. Growth in both volume and price shows strong bullish momentum, suggesting token values may continue to increase.
While increased trading volume has fueled Algorand’s recent rise, the decline in volume may indicate weakening momentum. However, current key indicators suggest that ALGO’s price may struggle to maintain upward momentum in the short term.
One indicator that supports this trend is the net cash flow of large holders. According to IntoTheBlock data, net inflow, a key metric measuring the balance between buying and selling of addresses holding between 0.1% and 1% of Algorand’s circulating supply, has turned negative.
When the net cash flow of large holders is positive, it shows that most are accumulating more Tokens rather than selling. Conversely, a negative reading indicates distribution, with owners selling more than they bought.
This change indicates that ALGO Holders are selling more than buying. If this trend continues, ALGO’s price, currently at $0.40, could face significant downward pressure.
ALGO price prediction: Possibility of correction
From an on-chain perspective, In/Out of Money Around Price (IOMAP) data shows that ALGO’s price is unlikely to increase further. IOMAP classifies addresses based on who is profitable, breakeven point, and who is unprofitable.
Using this data, one can identify support and resistance levels. Typically, the greater the volume or number of addresses, the stronger the level of support or resistance. At the moment, 146,530 addresses hold 48.64 million ALGO in profit, buying at an average price of 0.40 USD.
But at $0.42, 219,340 addresses hold 333 million ALGO and are not profitable. This indicates that Algorand’s price faces significant resistance, which could push it back.
If this situation continues, ALGO could pull back to the $0.35 level. However, if Algorand trading volume increases strongly with massive accumulation, the value could jump to $0.50.
