Institutional Bets Test ALGO's $0.23 Survival Threshold

Bears are increasingly pressuring Algorand's ALGO token, with critical support at $0.23 under immediate scrutiny. The price has been consolidating within a descending pennant pattern, with its key levels narrowing between $0.239 and $0.29 throughout August. Traders are closely watching whether ALGO can defend its base or face a breakdown toward $0.20. Analysts suggest mid-September as the likely timeframe for a breakout, with volatility expected to surge once the pattern resolves.

Currently trading near $0.234, ALGO remains below its 20-day EMA at $0.252, signaling near-term weakness. The 200-day EMA aligns with the current price at $0.234, reinforcing its significance as both a technical and psychological pivot. On the technical front, the RSI stands at 43, indicating subdued momentum, while the MACD shows a bearish bias with a negative histogram. The Stochastic oscillator also suggests oversold conditions, though this is not necessarily a reversal signal.

The token's price dynamics are further constrained by a descending channel, which has acted as a reliable guide for price action, with consistent respect for both upper and lower boundaries. Analysts suggest that a successful bounce from the $0.23 level could trigger a short-term rally toward the channel's upper boundary. However, the recent drop in liquidation volumes since March signals reduced leveraged trading activity and potentially lower volatility compared to earlier months. If the $0.23 support fails, the next key level at $0.21 could become the focus of further selling pressure.

Institutional liquidity support may provide some relief for bulls. Algorand recently partnered with XBTO to enhance its order book depth and reduce volatility, which could attract more institutional interest. This aligns with broader industry trends, where over 83% of institutions plan to increase their crypto holdings in 2025, prioritizing liquidity and compliance. The collaboration also extends to using Algorand for USDC stablecoin transfers, potentially boosting cross-chain adoption and long-term use cases.

Despite these fundamental underpinnings, spot netflows remain negative, highlighting cautious sentiment among retail and short-term traders. The outflows in late August, totaling $358K, reflect ongoing bearish momentum. If the $0.23 support is decisively breached, the next targets for bears are $0.21 and $0.19, where stronger historical demand has been recorded.

For active traders, the descending pennant suggests waiting for a clear breakout before entering new positions. A move above $0.25 could open the door for retests of the $0.27 and $0.29 resistance levels, with the potential for further upside beyond the pennant's upper boundary. However, failure to maintain above $0.23 may invite a retest of $0.21, particularly if broader market conditions remain weak.

The Algorand price prediction remains split between cautious optimism and bearish caution. While institutional adoption and liquidity improvements provide a positive backdrop, near-term technical indicators continue to lean bearish. Traders are advised to closely monitor the September 15 timeframe, when the pennant is expected to resolve. The coming weeks will be critical in determining whether ALGO can stabilize above $0.23 or face a deeper correction toward $0.20.