Algorand (ALGO) Sees Red Despite a Recent Flurry of Bullish Activity

Key Insights:

• It was a bearish morning session, with ALGO joining the broader crypto market in the red.
• While bullish news updates have limited the losses, ALGO has been at the mercy of the broader market and sentiment toward Fed monetary policy.
• ALGO’s technical indicators are bearish, with ALGO sitting below the 50-day EMA.

On Tuesday, Algorand (ALGO) rallied by 7.48%, supported by news of a LimeWire-Universal Music Group Partnership. Reversing a 6.20% loss from Monday, ALGO ended the day at $0.4945.

Bullish sentiment from across the broader market supported the Tuesday breakout session, with resistance at $0.50 limiting the upside on the day.

Sentiment towards inflation, the threat of a recession, and Fed monetary policy are market negatives, however.

Overnight, Fed Chair Powell delivered a hawkish stance on monetary policy that has pressured the crypto market this morning. Powell’s comments have also overshadowed bullish Algorand-related news updates.

Universal Music Group Goes NFT on Algorand Marketplace

On Tuesday, LimeWire signed a deal with Universal Music Group (UMG) to open the LimeWire collectibles marketplace to Universal Music Group Artists.

According to the announcement,

“UMG artists can now offer audio recordings, audiovisual content, backstage footage, and any artwork and images as NFTs on the LimeWire marketplace and sell them directly to fans and collectors.”

LimeWire will collaborate with UMG on making “digital music collectibles accessible to a wider audience.”

The announcement went on to say,

“As part of this partnership, UMG will provide licenses that will allow LimeWire to partner with UMG artists to launch innovative music-based NFT projects utilizing the LimeWire marketplace.”

LimeWire will launch the NFT marketplace on Algorand.

Last week, Hivemind Capital and Algorand announced the acquisition of the music platform, Napster.

BREAKING: @HivemindCap and @Algorand today announced the acquisition of @Napster, to once again revolutionize the music industry by bringing blockchain and Web3 to artists and fans. Music industry veteran Emmy Lovell has been named interim CEO. Stay tuned for further details. pic.twitter.com/y5NEI1oiRA

— Hivemind (@HivemindCap) May 10, 2022

The latest music industry news follows FIFA announcing Algorand as an official partner ahead of this year’s FIFA World Cup in Qatar.

ALGO struck a May high of $0.7842 in response to the FIFA news before tumbling to a May 12 and current year low of $0.3412.

Last week, the collapse of TerraUSD (UST) and Terra LUNA sank the crypto market to 2022 lows.

ALGO Price Action

At the time of writing, ALGO was down by 3.88% to $0.4753. A mixed start to the day saw ALGO rise to a morning high of $0.5038 before falling to a low of $0.4717.

Technical Indicators

ALGO will need to move through the day’s $0.4870 pivot to target the First Major Resistance Level at $0.5154. ALGO would need broader market support to breakout from this morning’s high of $0.5038.

In the event of an extended rally, ALGO could test the Second Major Resistance Level at $0.5362 and resistance at $0.54. The Third Major Resistance Level sits at $0.5854.

Failure to move through the pivot would bring the First Major Support Level at $0.4662 into play. Barring an extended sell-off, ALGO should avoid sub-$0.46. The Second Major Support Level sits at $0.4379.

Looking at the EMAs and the 4-hourly candlestick chart (below), the signal is bearish. ALGO sits below the 50-day EMA, currently at $0.4986. This morning, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA eased back from the 200-day EMA; ALGO price negative.

A move through the 50-day EMA to $0.51 would support a run at $0.54.