The price of Algorand (ALGO), a popular cryptocurrency, continues to dwindle, leaving 97% of its investors nursing significant losses. The virtual coin’s persistent depreciation ignites fears that investors’ exit might trigger a larger-than-anticipated downward spiral.
The market behavior of Algo investors appears to be a flight to safety, driven by a steep fall in the token’s price, which has nosedived from $0.285 at the end of February to $0.112, its current valuation. The fact that ALGO’s poor performance is playing out at a time when Bitcoin has crossed the $30,000 milestone has compounded investors’ frustration and escalated the sell-off trend.
ALGO stands out for its failure to buck the trend in a crypto market that has witnessed a fair share of recoveries. The disappointing price trajectory is reflected in the investor behavior, with ALGO holders, primarily medium-term investors (holding for over a month and under a year), unloading their assets to stem the bleeding.
The investors’ scramble to exit has led to a 145% reduction in their portfolio values over the last month, thereby decreasing their dominance. These medium-term investors now control just 56% of all ALGO, while short-term holders (holding for less than a month) command 25% of the total circulating supply.
Despite the mass exodus, this group still controls more than 5.43 billion ALGO worth over $600 million, making their movements key determinants of the token’s price direction. While positive moves could spur a recovery, the prevailing negative sentiment might likely lead to further price corrections.
A bullish turn of events seems a far-off prospect, as more than 97% of ALGO holders find themselves mired in substantial losses. This grim reality starkly contrasts the scenario in November 2021, when only 1% of investors were in the red. This percentage surged to 88% in just two months, underscoring the dire straits in which ALGO finds itself.
