IOTA (IOTA) seems to be mired in a long-term correction, and could break out after a period of consolidation.
IOTA has been decreasing alongside a descending resistance line since Sept 4. More recently, the line caused a rejection on Dec 30 (red icon).
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This led to a low of $0.69 on Jan 24. The price has been moving upwards since.
Currently, it is trading inside the $1.05 area, which had previously acted as support since Sept 27. Now, the area is expected to act as resistance once more.
The aforementioned descending resistance line is currently at $1.10.
Technical indicator readings
Technical indicators for IOTA in the daily time-frame are relatively bullish, since both the MACD and RSI are increasing.
More importantly, the RSI has moved above 50. The RSI is a momentum indicator and the 50 line is considered a threshold for a bullish/bearish trend.
While the MACD is moving upwards, it has not yet crossed into positive territory. This would go a long way in confirming the bullish trend.
The $1.08 resistance area, which is created by the 0.382 Fib retracement resistance level coincides with the previously outlined horizontal resistance area. Therefore, its reclaim would be a major bullish development.
IOTA wave count analysis
The most likely wave count does suggest that IOTA is in wave four of a five wave upward movement, which began on March 2020.
On July 2021 and Jan 2022 (green icons), the token bounced at the middle of a parallel channel connecting waves one and two. This effectively completed a fourth wave pullback, supporting the possibility that IOTA is still in wave four.
If correct, the aforementioned Jan 24 low should not be breached. Rather, after a move towards $1.55 and a period of consolidation, IOTA would be expected to break out and move towards new highs.
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