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IOTA Price Creates Bullish Candlestick After Testnet Announcement – Will it Break Out?

Last Updated May 16, 2024 8:09 AM
Valdrin Tahiri
Last Updated May 16, 2024 8:09 AM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • IOTA announced the launch the IOTA 2.0 public testnet on May 15.
  • The IOTA price has corrected by nearly 50% since its yearly high on March 14.
  • IOTA trades above a long-term horizontal support and has created a bullish pattern.

IOTA has not performed well in 2024. While it started the year with an increase, it has fallen since March, and has decreased by 30% relative to the price on January 1.

This could be set to change after the Testnet announcement triggered a bounce. Coupled with a bullish pattern, the price aims to break out from its resistance trend line, a sign that the correction is finally over.

What is IOTA’s Testnet?

On May 15, IOTA announced the launch of the IOTA 2.0 public testne t. One of its main features will be the migration from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) protocol.

This could further enhance scalability and efficiency, while also potentially making the supply deflationary, which is what happened to Ethereum since its own transition to a PoS protocol. On top of this, it should reduce the negative environmental impact of mining.

Other updates include increased decentralization by removing the central entity that managed network consensus, and increased security because of the new consensus mechanism. The IOTA team invited all developers and enthusiast to experiment with the new testnet and relay their thoughts.

The price bounced shortly after the announcement and closed the day with a bullish candlestick.

IOTA Price Prediction: Bounce & Breakout?

The daily time frame IOTA price chart shows a decrease under a descending resistance trend line since the yearly high on March 14. The decrease culminated with a low of $0.19 on April 13. This initially caused a breakdown from the $0.21 horizontal support area, but the price bounced, creating a long lower wick and saving the support (green icon).

Since then, IOTA has returned to the support area twice more, creating a triple bottom pattern. On top of being a bullish pattern, the triple bottom has been combined with a bullish divergence in both the daily RSI and MACD. Such a divergence often leads to a bullish trend reversal.

IOTA Price Bullish Pattern
IOTA/USDT Daily Chart | Credit: TradingView

After a bullish engulfing candlestick on May 15, the IOTA price is breaking out from its resistance trend line today. The trend line exists since the yearly high.

If this happens, it will confirm the bullish trend reversal and can start an upward movement toward the 0.382 Fibonacci retracement resistance level at $0.28. The level also coincides with a horizontal resistance area, increasing its significance.

A breakout from the trend line will go a long way in confirming the bullish trend reversal.

IOTA Could Increase by 30%

Despite a 60-day correction, there are multiple signs pointing to an incoming IOTA rally. More specifically, there is a bullish pattern, bullish candlestick and bullish divergence in technical indicators.

A breakout from the descending resistance trend line will confirm the reversal and can trigger a 30% increase. Alternatively, a daily close below $0.21 will invalidate the bullish outlook and can trigger a notable decline.

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