Crypto: Algorand Collapses After A 300% Surge In Active Addresses

While some cryptocurrencies are breaking their all-time highs at the first light of a bull run, others seem to be waiting for their moment. Algorand, with its rapidly expanding network, experienced a meteoric rise before plunging into a brutal correction. But behind this volatility lie intriguing market movements that warrant a deeper analysis of this crypto.

The Spectacular Rise of Algorand: A Network in Full Swing

Since December 1st, the Algorand (ALGO) network has seen its number of active addresses soar by 300 %, jumping from 123,000 to over 427,000. This exponential increase, fueled by heightened adoption and growing blockchain use, has propelled the ALGO price to a peak of $0.6133.

Active $ALGO addresses spiked by over 300% since December 1st, signaling a significant uptick in network activity. pic.twitter.com/SgfvB3HiiZ

— IntoTheBlock (@intotheblock) December 4, 2024

However, this dynamic has encountered a strong correction. Within 48 hours, the price of ALGO dropped by 10.5 %, reaching a floor of $0.459. According to IntoTheBlock, this intense network activity should have stabilized the increase.

But the decline in active addresses, which now stands at 343,000, has weakened this momentum.

Key figures:

• A 318 % increase in the monthly price;
• A decrease in large transaction activity from 309 to 162;
• A net outflow of major holders down to -25.34 million ALGO coins.

These data illustrate that, without the confidence of major crypto investors, the market struggles to maintain a sustainable ascent.

Crypto Market: Whales Turn Their Backs on ALGO

The recent volatility of Algorand highlights the importance of major market players, often referred to as “whales”. In recent days, they have significantly reduced their activity, preferring to sell rather than buy. The result: a notable decrease in the net flow of tokens and a market dominated by short positions.

According to Coinglass, the long/short ratio reveals that the majority of investors are now betting on a continued price decline. At the same time, the negative funding rate on the crypto exchange DyDx confirms that selling positions dominate.

This retreat of the whales reflects their caution in the face of an uncertain trend. “When the whales leave the waters, it is often wise for the small fish to wait for their return,” some may likely say.

Yet, if the current support at $0.45 holds strong, a rebound could propel ALGO towards a resistance of $0.71.

Amid the turmoil, Bitcoin recently soared beyond $100,000, capturing 57 % of the crypto market and relegating altcoins more or less to the background. A boon for maximalists, but a frustrating wait for those hoping for an imminent altseason. The path still seems long for a trend reversal.