IOTA has seen a 2.98% price increase over the past 24 hours of trading. The cryptocurrency is currently exchanging hands at a rate of $0.7199 per coin after seeing a 2.58% price drop over the past 7 trading days.
What is IOTA?
IOTA is a cryptocurrency that is based off of a new consensus mechanism which is different to the typical blockchain consensus mechanism used by Bitcoin and the majority of other Altcoins. IOTA has instead elected to use a distribution ledger technology known as Tangle.
Tangle is a consensus mechanism that is a Directed Acyclic Graph (DAG). Using a DAG has many benefits such as fast transactions, micropayments, fee transaction and also being quantum proof. The network functions by users verifying each other’s work on the network for verification which removes the miners required on traditional blockchains. This means that everyone plays an equal role within the network.
The introduction of fast and free transactions gives birth to the usage of micropayments. This is one of the strongest reasons as to why IOTA is perfect to be the base currency in the developing machine to machine Internet of Things economy.
Where is IOTA currently ranked?
IOTA is currently ranked at 11th position in terms of overall market cap across the entire industry. The 15-month-old coin has a total market cap value of $2 billion after suffering a 21% price decline over the past 30 trading days.
Let us continue to analyse price action for IOTA over the long term.
IOTA/USD – LONG TERM – DAILY CHART
The epic bull run
Analysing price action from the long term perspective above we can see that the market had experienced a significant bullish run toward the end of 2017, when price action started from a low of $0.3289 on November 5, 2017, and extended to an all time high of $6.43 on December 6 2017. This was a price increase of over 1880% from low to high.
What happened after?
We can see that after price action placed the ATH, it had rolled over and immediately found support at the .5 Fibonacci Retracement level priced at $3.39 during December 2017. This is a Fibonacci Retracement measured from the entire bullish run outlined above.
Price action continued to decline through January 2017 until support was reached at the .786 Fibonacci Retracement in February 2017. The market was not able to hold above this level and continued to decline even further through March 2018 until it found support at the .886 Fibonacci Retracement level priced at $1.02.
This level of support continued to hold throughout the rest of the trading year until the August bloodbath hit. During the bloodbath, the entire cryptocurrency market dropped below strong support levels in a serious capitulation in market cap. IOTA penetrated below the .886 Fibonacci Retracement and nearly completed a 100% Fibonacci Retracement of the entire bullish run outlined above.
Let us continue to analyse price action a little closer over a shorter time horizon to highlight any potential support and resistance area.
IOTA/USD – SHORT TERM – DAILY CHART
What’s been going on?
Over the course of the past four months, we can see that price action has continued to steadily decline after dipping below the 100 day moving average in June 2018.
We can see that the market had originally found some support at a downside 1.272 Fibonacci Extension level priced at $0.90 during July, however, the August bloodbath caused price action to fall further lower until it found a reversal level supported by the downside 1.618 Fibonacci Extension level priced at $0.39. We can see that this price level provided enough support for the market to rebound and to start to regain some of the losses incurred.
Where are we now?
Price action has rallied above the previous downside 1.414 Fibonacci Extension level priced at $0.69 and has now been using this level as the price support for the past week of trading.
Where can we go from here?
If the bulls continue with their recently found momentum we can expect immediate resistance to be located at the previous downside 1.272 Fibonacci Extension level priced at $0.90.
Further resistance above this level will then be expected at the psychological round number handle of $1 which is also bolstered by the 100 day moving average which is currently hovering within this area.
What if the bears take control?
If the bears push the market below the support identified at $0.69 then we can expect initial support to be located at the $0.60 round number handle. Support following this can be located at the $0.50 handle and then the downside 1.618 Fibonacci Extension level priced at $0.039.
What are the technical indicators saying?
The technical indicators within the market are currently heavily favouring the bulls at this current moment in time. The RSI is trading well over the 50 handle indicating that the previous bearish momentum has faded and that the bulls have taken control. If the RSI can remain above 50 we can expect the market to regain some of its losses.
Similarly, the moving averages have shown a bullish crossover signal as the 7 day EMA crosses up above the 21 day EMA indicating that the bullish pressure is increasing within the market.
Let us continue to analyse price action at a closer time frame for those who cannot take their eyes off of the charts!
IOTA/USD – SHORT TERM – 4HR CHART
What’s been going on?
Analysing the market from the short term perspective above, we can see that the recent bullish momentum has pushed price action from a low of $0.46 on August 22, 2018, to a high of $0.80 on August 29 2018. This was a price increase of 74% from low to high.
We can see that price action has since rolled over and found support at the short term .382 Fibonacci Retracement level priced at $0.67. This Fibonacci Retracement is measured from the bullish run outlined in the paragraph above. We can also see that price action has begun to form a short term consolidation pattern known as a symmetrical triangle.
Where can we go from here?
As the market approaches the apex of the triangle it is likely to break out in one direction or the other.
If price action can break up above the upper boundary of the triangle we can expect immediate resistance to be located at the previous high of $0.80. If it can continue further higher, then from a short time framed perspective we can expect further resistance to be located at the 1.272 Fibonacci Extension level priced at $0.90 followed by the 1.414 Fibonacci Extension level priced at $0.95.
Alternatively, if the bears push price action below the lower boundary of the triangle we expect immediate support to be located at the .382 Fibonacci Retracement level priced at $0.67 followed by the .5 Fibonacci Retracement level priced at $0.63. If the market can continue even further lower we can expect significant support at the .618 Fibonacci Retracement level priced at $0.59.