- Algorand’s (ALGO) social mentions and engagement significantly surged, triggering a rise in its price.
- Despite previous setbacks, market sentiment around ALGO has improved, with most open contracts adopting a long position.
Algorand (ALGO): Social Engagement Sparks Recovery
Algorand (ALGO), experiencing an extended downturn, is making a promising comeback, fuelled largely by increased social activity and changing market sentiment.
The Power of Social Interaction
Algorand’s social mentions, contributions, and engagement witnessed a notable surge on June 16, as reported by the social intelligence platform LunarCrush. Outshining many of its competitors in terms of social activity, Algorand earned the accolade of being named the “coin of the day.”
This spike in social metrics signifies that Algorand’s community interaction surpassed that of other projects. The subsequent rise in discussions and searches coincided with a significant uptick in ALGO’s trading volume on July 14, reaching its highest point since March.
Revival in Market Sentiment
The surge in volume provided a strong backing for ALGO’s price, leading to a 7.32% increase within the last 24 hours. This price jump brought a sigh of relief to the 45th-ranked cryptocurrency, which has been grappling with a significant downfall throughout the year.
Back in June, ALGO was labeled an unregistered security by the SEC following a class-action lawsuit against Binance and Coinbase, causing its price to hit an all-time low. However, the tide seems to be turning, with changes in market sentiment suggesting a more optimistic outlook.
Data from Santiment indicates that Algorand’s weighted sentiment, which gauges unique social commentary about an asset to assess average perception, has been on the upswing since June 19. While the still negative sentiment reflects continued market caution, the increasing trend suggests the broader community’s viewpoint on ALGO is no longer as bleak as before.
Overcoming Challenges and Looking Ahead
Despite the recent positive developments, Algorand faced a setback with the closure of Algofi, its Decentralized Finance (DeFi) infrastructure. Due to a “confluence of events,” as stated in a recent community update, the decentralized network can no longer sustain the platform, leading to a decrease in previous lending activities involving ALGO, Circle (USDC), vALGO, and others.
Nevertheless, ALGO’s funding rate, as per data from Coinglass, moved from negative to positive territory. Funding rates represent periodic asset transfers between traders holding short and long positions in open perpetual contracts. A positive funding rate, as shown by ALGO, indicates that traders maintain a bullish sentiment, offering a hopeful outlook for ALGO’s future price action.