IOTA is trending lower against the dollar after previously breaking below a symmetrical triangle consolidation pattern. Price is forming another short-term consolidation pattern at the moment and it looks like a bearish flag signal.
IOTUSD was rejected on its test of the descending channel resistance visible on the 4-hour time frame and might have its sights set on the next support levels. At the moment, price is testing the swing low around 1.3420 and the 38.2% extension.
Stronger selling pressure could take it down to the 50% extension around 1.1153 or the 61.8% extension at 0.8828. A test of the channel support could also hit the 76.4% extension at 0.5952 or the full extension at 0.1304.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. These moving averages are slightly above the channel resistance to add to its strength as a ceiling in the event of another test.
Stochastic is pulling up to show that buyers are ready to regain control of IOTA price action. RSI also has some room to climb, so bullish momentum might still return. However once both oscillators hit overbought levels and turn lower, selling pressure could pick up again.
Dollar weakness came in play after US Secretary of State Tillerson was fired by US President Trump. This brought back fears of protectionism, especially since Trump emphasized his plans to impose higher tariffs on China soon after.
Then again, cryptocurrencies are under pressure thanks to recent headlines on regulation and security issues. To top it off, IMF head Lagarde also spoke about the use of cryptocurrencies to facilitate illegal and terrorist activity, calling upon encryption experts help “fight fire with fire.”
Even so, IOTA co-founder Dominik Scheiner remains optimistic that more partnerships can be created in the digital asset industry, heralding the “next growth cycle” for IOTA. Schiener founded IOTA alongside David Sønstebø, Sergey Ivancheglo and Serguei Popov in 2015.
Source: New feed