Algorand (ALGO) has weakened more than 40% after FTX filed Chapter 11 for bankruptcy and created fears of a domino effect that could drag other crypto exchanges into the mud. The risk of further decline for ALGO is still not over, especially after the U.S. Federal Reserve signaled that it would keep lifting interest rates in 2023 in order to bring down inflation.
See Related: Bitcoin Exchange Reserves Hit New Lows
The sentiment on the cryptocurrency market has plummeted again, and we could probably see new lows for ALGO in the days ahead. The U.S. Federal Reserve hiked the benchmark interest rate by 50 basis points this Wednesday, and it is important to note that the federal funds rate is now in a range of 4.25% to 4.5%, which is the highest level since the 2007 year.
The U.S. economy faces recession risk that could dent corporate earnings, and according to many analysts, stocks and cryptocurrencies would not make any significant jump until the U.S. Federal Reserve shifts its policy from “hawkish” and goes back to monetary easing.
Algorand (ALGO) Technical Analysis
Algorand (ALGO) has weakened from $0.44 to $0.20 since November 07, and the current price stands at $0.21. The price continues to move below the 10-day moving average, indicating that this cryptocurrency could fall even more in the upcoming days.
Algorand (ALGO) might have a hard time holding above the current support level, which stands at $0.20, and a break below this level would indicate that we could see ALGO at $0.18 or even below. The upside potential remains limited for now; still, if the price of Algorand (ALGO) jumps above $0.30, the next target could be $0.35.
Conclusion
The U.S. Federal Reserve hiked the benchmark interest rate by 50 basis points this Wednesday, while Fed policymakers forecasted that the central bank’s rate will reach a range of 5% to 5.25% by the end of 2023. This is certainly negative news for riskier assets like stocks and cryptocurrencies, and in the days ahead, Algorand (ALGO) might have a hard time holding above the current support level, which stands at $0.20.
See Related: Binance Coin (BNB) Technical Analysis As Recession Worries Continue To Rise
