Algorand (ALGO) Price Prediction: Altcoin Could Go Lower as Network Activity and Social Dominance Drop

Over the last 30 days, Algorand's (ALGO) price has increased by 360% following a broader altcoin rally. As a result, daily active addresses on the Algorand network have surged to the highest point since November 7.

Algorand (ALGO) price has seen a 360% increase in the last 30 days, thanks to a broader altcoin rally. This has led to a surge in daily active addresses on the Algorand network, reaching their highest since November 7.

Usually, a rise in active addresses is seen as bullish for the price. However, this on-chain analysis might explain why that might not be the case.

Algorand Network Activity Surges

Data from IntoTheBlock shows that Algorand's active addresses have surged to 427,230 at the time of writing. For the uninitiated, active addresses are the number of unique wallets that successfully transacted on a blockchain.

This metric counts both the sender and the receiver. When the metric increases, it indicates rising user participation, which is largely bullish based on the price action. On the other hand, a decrease in active addresses shows that user engagement has fallen, which is bearish.

For active addresses to be bullish, it has to increase together with the price. But in this case, ALGO’s price has fallen 10% in the last 24 hours. Hence, the surge in network activity might not be boding well for a further uptrend, but that’s not all.

Another metric that might be suggesting that ALGO’s price could struggle to recover is social dominance. Social dominance is the portion of discussions related to a cryptocurrency compared to other assets in the top 100.

When the metric's units increase, there will be more chatter regarding the altcoin. In most cases, this drives higher demand, which translates to an increasing price.

However, according to Santiment, Algorand's social dominance has dropped from 1.56% on November 30 to 0.71% today. Given the current state, ALGO’s price might see a further decline.

ALGO Price Prediction: Altcoin Could Go Lower

ALGO’s price is currently $0.51. On the 4-hour chart, the altcoin seems to be on the brink of dropping below the 20-period Exponential Moving Average (EMA).

The EMA is a technical indicator that tracks the price changes of an asset within a specified duration. When the price is above the EMA, the trend is bullish. But in Algorand's case, the decreasing price suggests that the token risks a major correction.

If this is confirmed, Algorand's price could drop to $0.38. However, this prediction might be invalidated if buying pressure increases and the altcoin manages to stay above the EMA. In that case, the altcoin could rise to $0.61.