IOTA Price Breaks Out After Mainnet Release – What’s Next?
What's Next for IOTA After Breakout? | Credit: Hameem Sharwar
Key Takeaways
- After the testnet announcement on May 15, IOTA finally launched its mainnet on June 4.
- The IOTA price has corrected by nearly 50% since its yearly high on March 14.
- IOTA has traded above a long-term horizontal support and created a bullish pattern.
IOTA has not performed well in 2024. While it started the year with an increase, it has fallen since March, having decreased by 25% relative to the price on January 1.
However, the testnet announcement on May 15 triggered a bounce. This continued with the mainnet release on June 4. Since the price has broken out from a descending resistance trend line, it is possible the correction is finally over.
IOTA Price Finally Breaks Out
The IOTA price bounced after reaching a low of $0.190 on April 13 (green icon), validating the $0.205 horizontal area as support. After creating a higher low and bullish divergence on May 15, the price broke out from the trend line the next day.
IOTA has increased since the breakout, creating several higher lows in the process. Additionally, it caused the MACD to move above 0 and the RSI to increase above 50. However, the price still trades below the main resistance at $0.278. The resistance is created by the 0.382 Fibonacci retracement level and a horizontal resistance area.
A successful breakout will confirm the correction is over and can lead to an increase toward the yearly high of $0.42. Conversely, a daily close below $0.205 horizontal support area will instead mean the trend is still bearish.
What is IOTA’s Testnet & Mainnet?
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.
Then, on June 4, IOTA finally announced the release of its mainnet. The team also announced a launch party on June 5. At this time, the IOTA price had already broken out from its main resistance area.
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.
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 at Least 20%
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.
The breakout from the descending resistance trend line could be the first step in this bullish reversal, which will be confirmed with a close above the 0.382 Fibonacci retracement resistance level at $0.28.
