The IOTA token value on Wednesday tumbled by over 20% against the US Dollar.
The IOT/USD pair in July had established a monthly high at 1.254-fiat. But owing to the cryptocurrency market’s poor health, the pair failed to sustain its peak and fell towards 0.881-fiat. The level proved to be a decent support and influenced IOT/USD to attempt a successful recovery. The pair, however, formed a consolidation range, never attempting a breakout above 1.254-fiat.
On August 3, the IOT/USD slipped past its strong support in consequence of poor fundamentals. Reports believed price fell due to manipulation on BitFinex exchange. Later, Sirin Labs, creator of a blockchain smartphone and one of the earliest adopters of IOTA, called off their deal with the company. By then, the IOT/USD value had already fallen to a new low near 0.737-fiat.
The pair continued to record losses at the beginning of today’s Asian trading hours. The sentiments didn’t improve in the European session due to the cryptocurrency’s market overall bearish bias. Reports about the company’s co-founders fighting with each other also progressed the selling sentiment. Though, a clarification ensued from the press reports. At the time of this writing, the IOT/USD pair has established new lows towards 0.0591-fiat. This amounts to a 95% drop from the July’s peak.
Following the massive slip, the IOT/USD is now targeting 0.459-fiat as its next support level. This support was instrumental in November 2017’s rally towards 1.886-fiat and could hold price from falling into a severe bear trap. Looking the other way around, the IOT/USD gains are capped by a strong resistance level at 1.254-fiat.
We also noticed a downward slope formation through the three very recent higher highs, confirming a medium-term bearish bias on the daily chart. The IOT/USD has already crossed above it, but a potential retest is underway. Should the pair slip below the downward slope, it would intensify the bear trap further.
The indicators are also not supporting bulls. So far, the IOT/USD has slipped below its 50H, 100H and 200H SMA. With the 100H SMA below the 200H one, the overall bias of the market remains bearish. The RSI and Stochastic indicators are also inside the oversold region, awaiting a potential upside correction. Should it happen, the pair would test the 50H SMA as its interim resistance level, leaving enough scope for day traders to squeeze out smaller profits. However, placing a stop loss on your long positions is recommended in this otherwise short market.
Featured image from Shutterstock. Charts from TradingView.
Last modified (UTC): August 8, 2018 21:37