- Algorand has been the worst-performing cryptocurrencies this year.
- AlgoFi, the biggest player in its DeFi ecosystem, is shutting down.
- The other parts of its ecosystem are not doing well either.
Algorand price continued its strong sell-off on Tuesday as challenges in its ecosystem continued. ALGO tumbled to a low of $0.1077, a few points above the all-time low of $0.0918. It has crashed by over 62% from its all-time high, making it one of the worst-performing big-cap cryptocurrencies in the world.
AlgoFi shuts down
Algorand is a blockchain project that aims to become a major rival to popular platforms like Ethereum and Solana. The network has advanced features like fast speeds and low transaction costs.
One way of measuring the success of a layer-1 or layer-2 network is to look at its ecosystem. In Algorand’s case, you should look at the performance of key areas like Decentralized Finance (DeFi) and non-fungible tokens (NFT).
The challenge for Algorand is that its network did not become highly popular among developers and users. For example, it has a DeFi TVL of over $83 million making it the 32nd biggest network in the industry.
Read more: How to buy Algorand.
The level of activity among its DeFi applications has been a bit weak. As a result, AlgoFi, which was the biggest player in Algorand’s ecosystem, announced that it would suspend its operations. The developers cited weak action in its platform. AlgoFi has a TVL of over $34 million, down from its peak of over $162 million.
A closer look at the other parts of Algorand’s DeFi ecosystem shows that the network is not doing well. For example, the TVL of leading players in its ecosystem like Folks Finance, Lofty, Pact, and Humble DeFi shows that their TVL has dropped by more than 30% in the past 30 days.
Algorand’s NFT ecosystem is also not doing well. For one, the volume of FIFA+ NFTs, which it runs, shows that it has died.
Most importantly, the volume of Algorand traded in exchanges has dried up recently. Data by CoinGecko shows that the daily volume averages less than $50 million every day.
Algorand price prediction
Turning to the daily chart, we see that the ALGO price has been in a strong bearish trend in the past few months. This decline saw the token drop below the important support level at $0.1577 on May 24th. This was an important support sinee it was the lowest level in December last year.
Algorand has plunged below all moving averages while the Average Directional Index (ADX) has moved to the lowest point since May. Its volume has also dropped in the past few months. Therefore, the outlook for the ALGO token price is bearish, with the next level to watch being at $0.009.
