- Algorand announces that it plans to implement changes from relays to a peer-to-peer format.
- ALGO sees short-term love from the bulls but investor sentiment remains low.
Algorand just announced planned changes to its blockchain network in a bit to improve its operations. Some of the changes highlighted in the network could have far-reaching consequences that could include facilitating higher ALGO demand.
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According to the announcement, the Algorand network is moving away from relays in favor of a peer-to-peer network approach. More importantly, the network revealed that it is working toward incentivizing consensus. The main reason for this is to boost the network's level of decentralization.
The decision to incentivize consensus will have two main impacts. The Algorand network will have a higher number of channels that will facilitate peer-to-peer data propagation. The second impact underscores a potential impact on ALGO demand. This is because it will encourage more individuals holding a smaller amount of ALGO to stake their coins.
Algorand's plans to incentivize consensus could thus end up facilitating long-term demand for ALGO. So how is this coin actually fairing especially under recent market circumstances? Well, the cryptocurrency has been on an overall downward trajectory since February this year.
ALGO price action
ALGO exchanged hands at $0.09 at press time after delivering a bullish performance for the third consecutive day. While this is not necessarily a sign that the bears are done with their assault, its Relative Strength Index (RSI) signals that bullish momentum might be building up. This is because the RSI has been pushing higher above the oversold zone.
Source: TradingView
The RSI wasn't the only sign indicating that ALGO registered more accumulation at its current lows. The cryptocurrency just registered its highest social dominance in the last 24 hours. This could be for two reasons. Algorand's announcement about changes coming to the network could underscore the social visibility involving the announcement.
Source: Santiment
Read Algorand's [ALGO] price prediction 2023-24
The second major reason could be due to accumulation near the recent low followed by the three-day rally. It could be an alignment of those two factors, in which case it could have a longer-lasting impact on demand. However, that might not necessarily be the case because of investor sentiment.
Source: Santiment
It turns out that investor sentiment still didn't show sturdy confidence about ALGO's ability to bounce back in the short term. This might undermine ALGO's current rally. Despite this, its future prospects have arguably just improved following the announcements about upcoming network changes.
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