Over the last 30 days, Algorand’s (ALGO) price has increased by 360% following a broader altcoin rally. As a result, daily active addresses on the Algorand network have surged to the highest point since November 7.

Typically, this rise in active addresses is supposed to be bullish for the price. However, this on-chain analysis explains why this may not be the case.

Algorand Network Activity Rises

According to IntoTheBlock, Algorand’s active addresses have surged to 427,230 as of this writing. For those unfamiliar, active addresses refer to the number of unique wallets successfully transacting on a blockchain.

This metric counts both the sender and receivers. When the metric increases, it indicates rising user participation, which is mostly bullish depending on the price action. On the other hand, a decrease in active addresses means user engagement has fallen, which is bearish.

For active addresses to be bullish, it has to increase alongside the price. But in this case, ALGO’s price has decreased by 10% in the last 24 hours. Therefore, the rise in network activity might not support a further uptrend, but that’s not all.

One other metric suggesting that ALGO’s price might find it challenging to recover is social dominance. Social dominance refers to the share of discussions related to a cryptocurrency compared to other assets in the top 100.

When the metric’s rating increases, there will be more discussions concerning the altcoin. In most cases, this drives higher demand, which translates to an increasing value.

However, according to Santiment, Algorand’s social dominance has dropped from 1.56% on

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Author: Victor Olanrewaju