Iota (IOT/USD) Analysis November 23, 2017

While deciphering this cryptocurrency pair, the first thing analysts will notice is that long upper wick after the first week of launch and consequent lower lows. As we have seen the volatility in other crypto-pairs, IOTA is no different. Matter of fact, 5 weeks after launch, investors who had bought at open were down 44% but with the recent recovery, they have more than tripled their initial investment.

So from a technical perspective, how deep was June’s correction? Well, from June-July Hi-Los, IOTA prices corrected up-to the 78.6% Fibonacci retracement level before bouncing to current prices. If you interpret such moves from Fibonacci characteristics, the best IOTA prices can muster is test immediate highs of $1.1. There are hints of IOTA price action doing so if we judge from the recent IOTA bull rally.

Even though it is not very developed, the 20 period MA has been broken after that three bar reversal candlestick pattern between mid-October and early November and that has been followed by a $0.40 gain to current prices.

As noted, the rally this month has been steep and rewarding especially for those traders who nicked that break out on November 8. As we have mentioned above that the best prices can do is touch $1.1 before a potential correction.  IOTA is now $0.07 away from the final resistance at $0.98 before highs of $1.1 is cleared.

However, take note of that of that double bar reversal with overbought stochastics after prices touched $0.98 after yesterday’s close. You notice the same formation happened on August 26 and 27 before prices trickled lower.

Trading this pair in the 4HR will be straight forward. We know there was a double bar reversal pattern after prices tested $0.98 immediate resistance level. For that bear candle to be confirmed, prices need to break and close before the reliable 20 period MA. It’s that simple. In 3 weeks, IOTA bears found it hard to close below that support line as visible in the 4HR chart.

If prices fails to confirm the bear candlestick today AND close above $0.98, we shall cancel our bear projection and look to buy.