Iota bounced a bit during the day on Tuesday, using the 0.46 level as support. However, we are approaching the 0.50 level above. That was an area that will had offered significant support in the past, and now should offer resistance. In fact, as I write this article, we are starting to form a bit of a shooting star just below that level, so I think that the sellers may jump back in. While Bitcoin tends to lead the rest of the crypto currency markets in one direction or the other, it’s likely that Iota may be showing underlying weakness in the sector. At this point, I think it’s a relatively easy trade to take, at least as far as buying would be concerned.
Less than impressed
If we can break above the 0.50 level, I would be a buyer of Iota because not only had we bounced significantly, but we had cleared a psychologically important level. Alternately, and in this case possibly more probable, we could drop from here and reach towards the 0.45 handle again. Ultimately, this is a market that is in a downtrend in general, and I think that we could go reaching towards the 0.45 handle quicker than breaking out. However, you must let the markets do what they do, and simply follow where they go next. I think this market is going to lag behind Bitcoin at the very least, so while it may be part of a nice crypto currency portfolio, it should be a small part until it proves itself to be worthy of a larger portion of your trading capital.