ALGO Price Analysis: Will Bulls Drive Algorand Toward Double-Digit Gains?

• Algorand surged 27% in two days, surpassing key resistance, with strong RSI and MACD signals pointing to further rally potential.
• Anticipated U.S. tax relief on cryptocurrencies, including ALGO, fuels market optimism, possibly driving increased adoption and valuation gains.

Algorand (ALGO) recently surged over 19% in a single day, reaching a one-month peak of $0.460 by Thursday. This sharp rise reflects a combination of technical and fundamental factors, supported by robust data signaling continued upward momentum. By the end of 2024, Algorand solidified its position as a prominent platform in the blockchain sector.

A recent insights report revealed a 34.6% rise in Real World Asset (RWA) Total Value Locked (TVL) during the latter half of 2024, driven by innovations in asset tokenization through Lofty. Social media performance mirrored this growth, with 64.5% of annual follower gains on X (formerly Twitter) concentrated in the fourth quarter. 

2024 ended on a high for Algorand.

RWA TVL increased by 34.6% from $57 million to $77 million in the second half of last year, driven primarily by expanding asset tokenization on @lofty_ai

64.5% of the year’s follower growth on X occurred in Q4, with 13,196 new followers… pic.twitter.com/iG396rVrR1

— Algorand Foundation (@AlgoFoundation) January 14, 2025

Over 13,000 followers joined the community in Q4, surpassing the combined 7,251 growth seen in the previous three quarters. With instant finality, low fees, and steady 2024 RWA TVL growth, Algorand cements its position as a leading blockchain for institutional-grade solutions.

On-chain metrics further validate the positive outlook. ALGO’s open interest climbed from $95.10 million on Tuesday to $156.46 million by Thursday, marking the highest level in over a month. This increase signals a notable influx of capital, reflecting heightened investor confidence.

ALGO Price Surges 27% in Two Days — Indicators Suggest Further Rally

Technically, Algorand’s price has been climbing since finding support above the 60% Fibonacci retracement level from its November 4 low of $0.1083 to its December 3 high of $0.6121. The cryptocurrency rallied over 27% within just two days earlier this week, closing above its key resistance at $0.4287.

Source: TradingView

The Relative Strength Index (RSI) currently sits at 64, signaling strong bullish momentum as it pushes above its neutral level of 50. Additionally, the Moving Average Convergence Divergence (MACD) flashed a buy signal with a bullish crossover on Wednesday. Together, these indicators suggest that ALGO’s rally may extend further, potentially testing its December 3 high of $0.6121—a 30% increase from its current trading levels.

In the shorter term, the 4-hour chart paints a similar story. ALGO’s price has risen above all major moving averages, including the 20-, 50-, 100-, and 200-day lines, signaling continued upward pressure. Although the Stochastic RSI indicates an overbought condition, its upward trajectory suggests that bullish momentum still dominates.

Will ALGO Soar Amid Potential Tax Cuts?

Anticipation is building ahead of Donald Trump’s January 20 inauguration, with speculation that his administration could eliminate taxes on U.S.-issued cryptocurrencies like ALGO, Ripple (XRP), and Hedera (HBAR). This potential policy shift, hinted at by Eric Trump in December, has sparked market optimism.

If tax relief is enacted, regulatory pressures on ALGO might be significantly eased. Such a move could drive increased demand for the cryptocurrency, reinforcing a bullish sentiment among investors. Market analysts suggest these developments could mark a turning point for ALGO’s adoption and valuation in the U.S. market.