Algorand's ALGO surges 33.68% in 24 hours to 4-month high

Algorand's native token, ALGO, experienced a significant surge, jumping 33.68% in a 24-hour period. This substantial increase propelled the altcoin to a four-month high of $0.31 before settling at $0.2808. The market capitalization of Algorand correspondingly rose to $2.5 billion, while the 24-hour trading volume skyrocketed by 357.45% to $762.75 million. This dramatic upswing in volume and market cap indicates a substantial inflow of capital and heightened on-chain activity. However, the question remains whether this surge is a speculative bubble or the beginning of a more sustained upward trend.

Buyers have re-entered the spot markets with renewed vigor. According to Coinalyze, Algorand has recorded two consecutive days of a positive Buy Sell Delta. At the time of reporting, Algorand saw $111.39 million in Buy Volume compared to $110.6 million in Sell Volume. The previous day, the altcoin saw $181.84 million in Buy Volume relative to $168.61 million. This resulted in a positive delta of 791.88K and 13.24 million respectively, indicating aggressive spot demand.

Despite the price spike, derivatives data suggests a more cautious sentiment among traders. Open Interest jumped 54.85% to $163.36 million, while Derivatives Volume surged by 574.91% to $980.9 million. This increase in Open Interest and Volume signals growing participation in the Futures market as traders take strategic positions. However, the 24-hour Long/Short ratio stood at 0.9837, indicating a tilt toward short bets despite the price gains. This suggests that traders remain cautious and opportunistic, possibly anticipating a correction.

Exchange Netflow data revealed rising selling pressure. On the 13th of July, Netflow hit +$3.14 million, a clear sign of profit-taking. By press time, it dropped to +$480k, indicating slower but persistent outflows. When Netflow holds within a positive region, it implies higher exchange deposits than withdrawals, meaning holders are cashing out. Historically, higher selling pressure has preceded lower prices as downward pressure on price builds.

According to AMBCrypto’s analysis, Algorand saw a strong upswing as buyers returned to the market with strength. As a result, the altcoin’s Relative Strength Index (RSI) surged to 83.18, reaching overbought territory. Likewise, Algorand’s Stochastic RSI spiked to 100, also hitting overbought conditions. When these indicators enter the overbought zone, it signals buyers’ dominance but also warns of brewing volatility. If bulls defend this momentum, ALGO could push toward $0.34 next. However, if sell pressure persists, the price may retrace to $0.25, where support previously held.