We can breathe deep knowing that this week’s drop is not as aggressive as last week’s. It was a blood bath but a necessary one in this case because price action was desperate to correct after that bear pent up following January 17 and 24 close above the upper BB.
The subsequent weekly candlesticks were simply an accumulation and a sell “pump” which flooded IOTA tokens to the market and the result was a break below the 61.8% Fibonacci level and prices finding support some few points away from the middle BB.
A couple of weeks ago, the middle BB was not defined but at the moment, it is our support-and an important one. If bears are truly in the driving seat, we need to see close below last week’s lows and should buyers wrestle the lead from sellers then they must close above $3 before we even think of buying.
After January 16 bear engulfing pattern, prices found support at around $2 and moved higher. Despite buyers not finding enough momentum to push prices above 3, the subsequent consolidation might be an accumulation phase and a trampoline.
What’s interesting though is that hints of buy pressure is forming right at the 61.8% drawn from recent high lows. As mentioned in the weekly chart, we shall only wait for buyers to push above $3 or the 50% retracement level before we initiate longs.
I really think IOTA price action has been in consolidation phase for a pretty long time which is boring. However, while it lacks fireworks safe some few sparks on December 22, this is an important accumulation phase that can either make or break the value of this token.
There are two levels that we should watch: $4.2 and $3. If buyers push above $3 in the course of this week, then chances of $4.2 being cleared will be high. Those are two key barriers that if IOTA bulls gain enough momentum to overcome can signal a new wave of buy pressure with targets above $5.6.
From this set up, buyers can load small positions with targets at $4.2