The IOTA cryptocurrency has seen a significant rally in the past day, with an increase of nearly 70%. IOTA, known for its unique approach to blockchain technology that enables faster transactions, has recently made significant strides in the Middle East, which was imprinted on the price chart.
As the price was trending downward from April 2021, the spike caused a major breakout and could have signaled the start of the bull phase. Will this mark the beginning of a sustainable uptrend, or was it just news-driven?
A key development for IOTA is establishing a new foundation in Abu Dhabi. On Wednesday, November 29, the company announced the creation of the IOTA Ecosystem DLT Foundation, a pioneering initiative under the DLT Foundations Regulations of the Abu Dhabi Global Market (ADGM).
This foundation will receive a substantial investment of $100 million in IOTA tokens, to be vested over four years.
The funds are allocated for developing the IOTA ecosystem and enhancing the growth of the IOTA protocol. This includes partnerships with institutional investors, governments, and academic institutions for tokenizing real-world assets and integrating them into the blockchain, potentially bringing billions of dollars into the UAE’s virtual asset sector.
The move highlights Abu Dhabi, Dubai, and other regions in the UAE’s balanced approach to cryptocurrency, combining a positive attitude with prudent vigilance. This approach contrasts with the more contentious regulatory tactics employed by entities like the U.S. Securities & Exchange Commission.
From its last bull market high of $2.71, reached on April 15, 2021, the price of IOTA was in a downtrend. It formed a descending channel and pushed the price for a 96% decrease, measured to its lowest point of $0.13 made on June 13, 2023.
This low was revisited on August 17 and later in mid-October and validated as horizontal support. It was a higher macro low than the previous one made in March 2020, when the price spiked to $0.060, but the daily candle closed at $0.10, leaving a large wick.
An upturn and a breakout above the descending resistance on November 8 were seen. After a retest of the broken resistance for support, we saw this larger price spike from $0.16 to $0.28.
Zooming into the 4-hour chart, we can see that this uptrend was made impulsively, and we can count three waves with the price spike yesterday coming to 1.618 Fibonacci extension level. This level matched the vicinity of the previous high made on February 21 and was most likely why the momentum was stopped.
However, if this was a starting five-wave move, the price is currently in its wave 4 and will likely consolidate after another runup. If this count is correct, we could expect some sideways movement between $0.26 and $0.21 at its lowest before a higher high above $0.30.
If this plays out, it would mean that IOTA has started its multi-year bull market, and after its first correction, it would be expected to surpass even $0.30 at the next runup.
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