Algorand, among the altcoins witnessing substantial gains recently, experienced a notable uptrend over the past few days.
Despite this significant rally, many ALGO holders are feeling disappointed as they continue to face losses, rendering the recent increase in price seemingly futile.
Algorand’s Uphill Battle for Profitability
When a cryptocurrency is launched, its trajectory typically follows one of two paths: a rise and fall with eventual recovery, or an initial correction followed by a return to peak levels. However, Algorand (ALGO) deviates from this norm.
Since its launch in June 2019, ALGO charted its all-time high (ATH) early on and has since struggled to regain momentum. Currently trading far below its ATH of $3.27, the altcoin sits at a modest $0.31.
To reclaim its highest point and achieve fresh highs, Algorand’s price would need to surge by at least 926%. While demand for this surge is high, the likelihood of ALGO achieving it in the near future appears slim.
As a result, investors who purchased ALGO at approximately 20% of its ATH face an extended wait before seeing profits. These investors, known as all-time high holders, constitute 85% of all ALGO investors.
With nearly 16.1 million ALGO holders out of 20 million underwater, the prospects for profit remain dim despite ALGO’s recent 16-month high.
At present, the break-even metric shows minimal changes over the past two weeks, indicating marginal shifts in overall profits and losses among ALGO investors.
While the recent 71% rally has increased profitability for some, with 20.6% of all ALGO investors now in profit, this rise remains insignificant considering the substantial increase in price.
In conclusion, unless Algorand’s price surpasses $1, the likelihood of investors witnessing profits remains low.
Algorand’s Rally and Investor Dynamics
Despite Algorand’s recent price rally, the majority of investors remain underwater, meaning they have yet to see profits from their investments. However, this situation might not be entirely negative for the altcoin.
The lack of profits translates to a reduced likelihood of selling, which helps mitigate the typical bearish pressure associated with profit-taking. Consequently, ALGO can potentially continue its upward momentum without significant downward pressure.
Currently, Algorand’s price is approaching the critical $0.32 resistance level. A successful breach of this level could propel the altcoin to reach $0.35, marking a significant milestone in its rally.
ALGO/USDT 1-day chart. Source: Tradingview
Nevertheless, the possibility of selling pressure cannot be ignored entirely. If selling occurs, it could hinder ALGO’s progress, causing it to retreat back to the $0.30 support level. A failure to maintain this support level would invalidate the bullish outlook, potentially leading to a further decline to $0.28.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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