The Algorand price remains in a tight range this week, as activity in the cryptocurrency industry continues to stay muted.
Algorand (ALGO), a layer-1 network, was trading at $0.1865 on Thursday, just above its lowest level this year. It has plunged by nearly 70% from its November 2023 high.
Algorand is facing substantial challenges that may derail its recovery this cycle. First, its decentralized finance ecosystem is losing traction among investors.
According to DeFi Llama, the total value locked in the network has crashed to just $90 million, its lowest level since 2022. The figure has dropped sharply from the year-to-date high of $183 million. Most dApps in Algorand, like Tinyman, xBacked, and AlgoRai Finance, have all shed millions in assets.
Similarly, stablecoin volume on Algorand has also lost momentum. The network now hosts $135 million in stables, down from $138 million earlier this month. These figures remain relatively small, given that ALGO has a market cap of over $1.56 billion.
Meanwhile, there are signs that long-term Algorand stakers are exiting the network. Data from StakingRewards shows that net ALGO outflows over the last 30 days totaled 301 million tokens, or roughly $55 million. Algorand now has a staking market cap of $196 million, even though its reward rate of 7.58% remains higher than that of many competing tokens.
Algorand has also lost market share in the non-fungible tokens industry despite its partnership with FIFA. Total sales of NFTs in its network in the last 30 days slipped by 10% to $776,967.
Algorand price technical analysis
The daily chart shows that ALGO has been in a prolonged bearish trend over the past few months, dropping from a high of $0.6130 in November to a low of $0.1463.
The coin has formed a death cross indicator as the 50-day and 200-day Exponential Moving Averages crossed each other. It has also dropped below the 78.6% Fibonacci Retracement level. Therefore, the path of least resistance for ALGO remains bearish, with an initial target at $0.1463, its lowest point this year. A move below that level would open the door to further downside, potentially toward $0.10.
