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

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

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.

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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