New Delhi (CoinChapter.com) — The crypto market has struggled to recover from its last tumble in May. Although altcoins led the charge for resurgence, and BTC recovered some of its lusters as well, but the market is still a veritable roller-coaster. However, the IOTA coin seems to be performing well.
The token has risen by almost 44% since May 19, going from $0.8291 to $1.4813 before correcting to $1.2114. While this seems like good progress, the price chart for the coin has created a pattern that may worry traders.
Trouble Ahead For IOTA?
IOTA seems to be moving in a Rising Wedge pattern. Converging trend lines during an uptrend create a rising wedge pattern. Even though the pattern appears during a price rally, it foretells a bearish reversal. As the lines converge, sellers become active, which breaks the price momentum. The resulting loss of upside momentum gives the pattern its bearish bias.
The series of highs and lows make the rally appear bullish. However, prices often break in a direction opposite to the trend line.
IOTA prices have been below the 50-Day SMA since the day of the crash.
While the price has stayed above the 200-Day SMA, the two are nearly coinciding, with the price line set to go below the SMA line(blue). Furthermore, the price level of $1.3764 seems to present a strong resistance level. As such, it seems the crypto is on the verge of a trend reversal.
The token’s declining trading volume is a bearish indicator as well. The crypto may test support levels of $0.9070 soon.
What Is IOTA?
IOTA is a next-generation, open-source, distributed ledger. It is designed to power the Internet of Things (IoT) and Web 3.0. It is based on Tangle, a form of distributed ledger technology. However, Tangle is different from blockchain technology. While blockchains store information/transactions in sequential chains, Tangle transactions are stored individually in a stream and entangled together.
IOTA’s purpose is to record and execute transactions between machines and smart devices in the IoT. The non-profit organization has inked contracts with some of the world’s largest companies, including Jaguar, Dell, Bosch, etc., to develop real applications.
The IOTA token has no miners or stakers, which enables fee-less transactions. Also, IOTA recently announced the launch of its IOTA 2.0 DevNet, Nectar. It is the first fully decentralized IOTA network, with no coordinators and no transaction fees. This will attract more developers to build on the Tangle platform.
The Future Still Has Some Promise
IOTA is the backbone of the next industrial revolution- The Internet of Things.
As IoT grows, so will the network. IOTA has found application in various sectors, from automobiles to smart cities. In fact, Jelle Millenaar, Lead of Identity at the IOTA Foundation, shared a thread on Twitter today. In it, he highlighted the opportunities for the distributed ledger network in a recent proposal by the EU for a European Digital Identity framework.
As per him, “the EU legislation is well aligned with the vision of IOTA. It brings massive opportunities, and IOTA is well-positioned to take part in its R&D.”
IOTA has good fundamentals backing its token. Nevertheless, with the current market sentiments, it may take some time for the coin to gain bullish tailwinds. At the time of writing, the token was trading at $1.1666.