ALGO logs 45% intraday rally following Algorand’s deal with the El Salvador government

By Himadri Saha 4 Min Read
“El Salvador” by Carlos Smith is licensed under CC BY-NC-SA 2.0
  • ALGO/USD pair shoots up by 45% in the last 24 hours
  • El Salvador tapped Algorand for building government blockchain infrastructure
  • The ecosystem will move to a decentralized governance model on October 1

JAIPUR (Coinchapter.com) – Algorand’s native token ALGO soared by 45% on the back of news surrounding the network’s deal with El Salvador for a government blockchain infrastructure contract. In addition, Algorand’s decentralized governance model launch on October 1 also supplied significant bullish fuel to the ALGO/USD pair.

Buyers lined up in droves to push the pair’s prices up from $1.22 to $2.2 on Thursday. ALGO underwent a brief round of selloff that led to a 31% dip in prices from $1.49 to $1.03. But the current rally reversed all losses. However, profit-takers have begun selling the top, but Algorand’s fundamental developments kept bullish sentiment strong.

El Salvador And Algorand

Latin American asset tokenization and blockchain infrastructure company, Koibanx entered into a cooperation agreement with El Salvador to deploy a decentralized governing solution. Koibanx decided to leverage Algorand for the said project.

Related: Bitcoin falls 17% as the El Salvador experiment stutters during launch

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https://twitter.com/Algorand/status/1432738915325206545

The company cited Algorands’s performance, scalability, security, and functionality (to implement large-scale global projects) as reasons for leveraging Algorands’s technology.

A national blockchain-based COVID certification program, a point-of-sale credit issuance system, and various smart contract financing platforms formed the highlight of the El Salvador-Koinbanx deal.

“El Salvador is paving the way for other countries to make the promise of blockchain a reality. We are honored to be working with the government to enable Salvadoreans to access a global digital economy and the potential for a more prosperous future. To make this possible, we needed technology that was robust enough to handle the needs of an entire nation. We found that in Algorand, a proven blockchain that meets our rigorous requirements for speed, security and stability.”

said Leo Elduayen, CEO & Founder of Koibanx.

Algorand Moving To A Decentralized Governance Model

Along with the El Salvador deal, bulls also assessed the positive impact of Algorand’s shift to a decentralized governance model on the entire ecosystem. Consequentially, prices shot upwards amid the Algorand team’s preparations to go live with the said update on October 1.

https://twitter.com/AlgoFoundation/status/1432248468387532800

As per the official announcement, the move will allow all ALGO token holders to vote in the growth and development decisions regarding the Algorand ecosystem.

ALGO/USD Retreating From Overbought Levels

ALGO/USD’s near-vertical rally lost steam amid profit-taking sentiment. Sellers sold the top after the pair rallied into the overbought territory, with a relative strength index (RSI) topping 80.17. As a result, prices declined from $2.2 to $1.95 during the morning trading session.

Algorand's ALGO risks dropping further down
Algorand’s ALGO risks dropping further down. Source: ALGOUSD on TradingView.com

If the selling pressure continues, ALGO/USD pair might extend losses down to $1.62. But that’s the worst-case scenario. The entire cryptocurrency market remains mostly bullish. Hence, long-term investors will buy dips leading ALGO to resume the next leg of the rally.

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