ALGO's ascending triangle is ready for a breakout!Algorand (ALGO) has formed an ascending triangle pattern on the 4-hour chart. ALGO has been following a higher rising trendline but found repeated resistance around the $0.924 level. We’re currently at a point where the price can soon break on either side as the price congestion is becoming tighter and tighter.
Ascending Triangle Price Target
In technical analysis, the ascending triangle is a bullish chart pattern, but since the long term trend is bearish, we can’t rule out the possibility of a downside breakout either. Generally, the profit target for the ascending triangle is the measured triangle depth which is added to the flat resistance line projected to the upside.
In our case, the price target is the $1.180 level. But first, we need the breakout to the upside to hold above the resistance level of $0.924.
Money Flow Index
The Money Flow Index (MFI) signals a positive buying pressure as the MFI readings have been constantly above the mid-level 50 while we were developing this ascending triangle. The MFI can also be used to gauge any downside breakout. If we break below the upward sloping trendline, but the MFI remains above the 50 level, it might be a false breakout signal. In this case, we would need to readjust the trendline to fit in the new price developments.
Looking Ahead: The next big hurdle that the bulls need to overcome besides the triangle flat resistance level is the vital psychological number $1.0.
