Will Algorand Resume Uptrend After Ethereum Bridge?
Algorand went live in 2019 and did the ICO (Initial Coin Offering) in June of the same year. Algorand is a highly scalable layer 1 blockchain, which solves problems that plague Bitcoin and Ethereum blockchains, such as slow transactions and high mining costs. It offers low transaction costs of 0.001 Algos per transaction, fast transactions at over 1000TPS, and carbon negative. It is therefore ranked among Ethereum’s killer contenders, as it offers an attractive ecosystem to host and run dApps with greater efficiency.
It is for this reason that El Salvador has partnered with Koibanx to develop the country’s blockchain infrastructure using the Algorand blockchain network. Algorand also adds Waivlength, which is a social media platform. Blockchain networks are growing in the social media space as well as in decentralized online media, after DeFi and NFT.
But, Algorand had a weakness, that it is not compatible with the Ethereum Virtual Machine (EVM). Ethereum leads the number of apps built on its blockchain, and not being compatible with Ethereum means you’re out of a lot of the DApp market. But, the Algorand team takes care of it.
Algorand Funding EVM Programs
Algorand Foundation CEO Staci Warden told CoinDesk earlier this week that “we are inspired by the wealth of talent and activity on the Ethereum network and are committed to a multi-chain world.” Algorand presents two programs, worth $10 million each, one of which will go to developers who can provide EVM compatibility solutions, while the other will fund projects that can create development tools useful for the Algorand blockchain.
Thus, Algorand is trying to build a bridge to Ethereum, which will allow it to enter the strong developer community of the Ethereum network, as well as incentivize new developers by making it easier to build on Algorand. Both programs should therefore contribute to increasing the number of projects on the Algorand network.
Algorand Technical Analysis – ALGO/USD Weekly Chart
Will the 100 SMA hold for Algorand?
Algorand had a great year in 2021, rising from around $0.30 in January to $2.86 in November. In May, we saw a major decline as the crypto crackdown in China turned sentiment negative and ALGO/USD retreated to $0.70 where it formed a support zone. The 50 SMA (yellow) held as support in this area and eventually the price reversed as sentiment improved in the market.
But the crypto crackdown continues and in November we saw another bearish reversal. The support zone at around $1.75, which was the high from the beginning of last year, was broken, but the 50 SMA (yellow) again acted as support. However, the 50 SMA could not hold for too long as the decline in the crypto market continued in January and the price fell to the 100 SMA (gray). This moving average has held for the past few weeks, but could be broken as the price holds there. Below that, we still have the support zone around $0.70, so we are watching price action and might be tempted to buy this digital coin.