Iota (IOT/USD) Analysis December 14, 2017

In the last 3 trading days, USD bulls have been gaining ground against IOTA. While this is expected after that massive rally last week, we still maintain our bullish skew and expect this coin to inch higher in the coming sessions.

In the weekly chart for example, we can see that the trading range is suppressed. There are long upper wicks signaling bear pressure. Worth noting is last week’s strong bullish candlestick with long upper wicks meaning bears were pushing prices lower and that spilled over to this week were price action despite being bullish is narrow.

All in all, as long as weekly candlesticks remain aligned along the upper BB we remain bullish. Immediate support lines are marked by the Fibonacci extension levels at $3.9 and $2.8.

We shall keep an eye on these levels especially if there are some degree of correction. Note that this week’s candlestick might end up closing above the upper BB meaning IOTA over-valuation and a likely correction as we have seen before.

Two things to note in the daily chart. First is the obvious accumulation at the overbought territory of the stochastics. This over-extension is accompanied by a stochastics sell signal which has been driving prices lower in this time frame.

Secondly, note those lower highs relative to the upper BB after December 6. Even though we had this minor bear divergence in the midst of a strong bullish trend, we shall instead watch the 20 period and the minor support trend line and see how price reacts at those levels.

If the bear divergence is confirmed and today’s candlestick end up bearish and  close below the minor support trend line, then our first support level will be at $3.9 which is the 3.618 Fibonacci extension level marked in the weekly chart.

Otherwise, because of our bullish skew, any bullish break out from this minor wedge will mean bulls are in charge.

In our entry chart, we have three important levels that will determine the short term trend of this cryptocurrency.

These levels are the bullish wedge, the 20 period MA and the main support trend line at $2.8.

 For bulls to be confirmed, there must be a bullish break out above the wedge but also remember that this week’s candlestick is overstretched and likely to close above the upper BB.

Secondly, if IOTA prices fail to close above the 20 period MA, then it is likely that USD bulls might push them below the minor support trend line and that means the first support at $3.9 would be cleared. Notice bear momentum as shown by the bearish stochastics. If the latter happen, we shall wait until a stochastic buy signal is printed before we go long ideally at around $2.9.