Institutional Investors Examine ALGO's Ability to Hold Above the $0.23 Mark

Algorand's ALGO token is facing mounting bearish pressure as vital support at $0.23 is put to the test. The token has been confined to a narrowing range within a descending pennant, with key price boundaries tightening between $0.239 and $0.29 during August. Market participants are keeping a close eye on whether ALGO will maintain its support base or move downward toward $0.20. Many analysts predict that a breakout is likely to occur by mid-September, at which point volatility could increase significantly as the pattern resolves.

ALGO is currently hovering around $0.234, trading beneath its 20-day EMA of $0.252, which points to ongoing short-term weakness. The 200-day EMA sits right at the current price, emphasizing its importance as both a technical benchmark and a psychological level. From a technical perspective, the RSI is at 43, indicating lackluster momentum, while the MACD continues to show a bearish trend with a negative histogram. The Stochastic oscillator points to oversold territory, although this alone doesn't guarantee a trend reversal.

Price movement is further restricted by a descending channel that has reliably outlined ALGO's recent trading behavior by containing both upward and downward moves. Analysts note that a successful rebound from the $0.23 mark could prompt a short-term surge toward the channel's upper edge. However, liquidations have declined since March, suggesting reduced leveraged trading and lower volatility compared to previous periods. Should the $0.23 support give way, the next significant support at $0.21 may attract further selling.

Some bullish support could arise from institutional liquidity sources.

recently entered a partnership with XBTO, aiming to improve order book liquidity and dampen volatility, which may appeal to institutional investors. This move is consistent with a broader market trend, as more than 83% of institutions reportedly plan to grow their crypto portfolios in 2025, placing emphasis on liquidity and regulatory compliance. The collaboration also involves using Algorand for stablecoin transfers, which could drive cross-chain utility and expand long-term adoption scenarios.

Despite these supportive fundamentals, spot netflows remain in negative territory, reflecting a cautious stance among retail and short-term traders. Outflows in late August totaling $358K underscore the persistent bearish tone. If the $0.23 threshold is broken, the next downside targets are at $0.21 and $0.19, both of which have previously seen strong buying interest.

For those actively trading, the descending pennant pattern suggests waiting for a clear breakout before initiating new positions. If ALGO manages to rise above $0.25, it could re-challenge the $0.27 and $0.29 resistance levels, leaving room for potential upside beyond the pennant formation. Conversely, slipping below $0.23 could pave the way for a move toward $0.21, especially if overall market sentiment remains bearish.

Forecasts for Algorand’s price remain mixed, balancing cautious optimism with prevailing bearish signals. While increased institutional engagement and liquidity initiatives set a positive stage, short-term technical metrics remain negative. Traders should pay close attention to the period around September 15, when the pennant pattern is expected to resolve. The upcoming weeks will be pivotal in revealing whether ALGO can hold above $0.23 or faces a further slide to $0.20.