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The ugly spat between the IOTA team and a group of external security researchers is not helping matters either. Some believe that the IOTA founder and his team handled the whole episode immaturely, raising questions on the capability of the team to take the project further. Nevertheless, IOTA’s price has not slumped, which shows that the investors have not given up on the team completely.
Now, let’s look at the technical picture of the IOTA/USD pair.
IOTA remained range bound from mid-June to mid-November of last year. From early November to early December, the cryptocurrency rallied from a low of $0.33870 to a high of $5.59, which is a 1550 percent return within five weeks.
After that, the cryptocurrency remained volatile but range-bound near the highs for five weeks. It broke below the range and slumped to a low of $1.2 in early February. Since then, this is the fourth week of consolidation near the lows.
The previous consolidation had lasted only for five weeks. So, with the other coins attempting a pullback, can we expect an up move in the IOTA/USD pair?
Let’s look at the daily charts to identify the levels that will confirm that the consolidation has ended.
The cryptocurrency is attempting to hold the 78.6 percent retracement of the entire rally from $0.33870 to $5.8. It has largely remained range-bound between $1.5 to $2.2117 since Feb. 02 of this year.
Additionally, we find a symmetrical triangle formation at the lows with price attempting to break out of it.
The moving averages are turning down, but IOTA has risen above the 20-day EMA. The 50-day SMA is close to the upper end of the range at $2.2418.
If the price breaks out and closes (UTC) above the range, it has a pattern target of $2.9234. Visibly too, the major resistance is at $3 with only minor resistance at $2.62.
On the other hand, if IOTA breaks down and closes below the range, it has a pattern target of $0.7883. At the same time, the support zone between $1.1 to $1.2 is likely to attract buying.
So, what should traders do?
We don’t find any trade setups inside the range. However, once the price breaks out and closes above $2.23, long positions can be initiated with a suitable stop loss. If the bulls succeed in breaking out of $3, a rally to $4 is possible. Traders should avoid bottom fishing if the virtual currency breaks down of the range.