Algorand traders can take advantage of this support level for short-term gains

Algorand [ALGO] the bulls finally found recovery opportunities in the $0.28 area. The altcoin is rising from the ashes of its multi-month lows over the past two weeks.

The 38.2% and 61.8% resistance levels have limited buying rallies over the past few weeks. Buyers could now aim to move past the reversal pattern. At press time, ALGO was trading at $0.3395, up 2.27% in the past 24 hours.

ALGO 4 hour chart

Source: TradingView, ALGO/USD

The alt lost more than a third of its value in just ten days (June 9-20) and plunged to a 17-month low on June 19.

The recent upward trajectory (yellow) countered the selling pressure and inflicted a jump of more than 28%. But the 61.8% Fibonacci resistance coincided with the upper trendline of the bullish channel to create a barrier for the bulls.

Since then, ALGO has been experiencing a breakdown while forming a descending wedge on the 4-hour timeframe. If price continues to swing above the 200 EMA (green), buyers would look to hold immediate support and break out of the reversal pattern. In this case, the potential targets would be in the range of $0.33 to $0.35.

However, any bearish crossover of the 20/50/200 EMA could invalidate short-term bullish trends. The sellers would aim to retest the $0.31-$0.32 range ahead of a plausible recovery.

Reasoning

Source: TradingView, ALGO/USD

Over the past few days, the RSI resonated with the bearish narrative as it fell below the middle line. Although it posted a somewhat neutral stance, a steady swing below the 50 mark would help sellers delay the rally on the charts.

Nevertheless, the OBV maintained its slightly higher lows and thus affirmed a bullish divergence with the price action. But the ADX showed a considerably weak directional trend for the alt.

Conclusion

Looking at the declining wedge setup approaching the $0.33 support, ALGO could see some revival. In this case, the potential targets would remain the same as those discussed. However, any bearish crossover on the EMAs can delay buying efforts.

Additionally, investors/traders should keep a close eye on Bitcoin’s movements, as ALGO shares an 81% 30-day correlation with the master coin.