Broader weakness in the crypto market has been quite evident over the last week or so. As a result, we are starting to see Algorand (ALGO) forming a bearish pattern that could lead to a massive price correction. Here are some highlights:

• At press time, Algorand (ALGO) was trading at around $0.81, down 5% for the day.
• The $0.8 mark has proved to be a crucial support line but we expect ALGO to fall below that.
• When this happens, the coin could push towards $0.5 in the near term.

Data Source: Tradingview 

Algorand (ALGO) – The coming 40% correction?

There is no doubt the broader crypto market has seen a lot of weakness in recent days. Algorand (ALGO) has also followed suit. After a more robust performance at the start of the month, the coin is now on the decline.

The $0.8 mark remains one of the key support zones. Although bulls have done well so far to maintain the price action above this, we don’t expect ALGO to hold out for much longer. As a result, the coin could fall to $0.5 before we start to see any signs of a trend reversal.

This will represent a correction of nearly 40%. However, if bulls can somehow manage to send ALGO above $0.9, the bearish outlook may abate in the foreseeable future. At press time, the coin was trading at $0.81.

Is it the right time to buy Algorand (ALGO)?

Well, most coins right now are trading lower, so if you are a dip buyer, this would be the time to come in. But when you consider that more weakness is projected on Algorand (ALGO), it would be more prudent to sit out for now and wait for the price to decline further. At least that way, you get minimal downside risk and a discount when you decide to buy.