Jaipur (CoinChapter.com) — IOTA has lost around 25% of its value against the USD, and it now looks “technically sick.” The cryptocurrency market’s U-turn from a recovery rally has further added salt to the wound. Is there any hope for bulls?
Below 20 EMA & 200 MA
The daily chart of the IOTA/USD shows the trading pair staying restricted below the 20-day exponential moving average (EMA) for two weeks now. After June 3, the nascent rally lost steam as sellers showed up to cash out their holdings. Since then, IOTA bulls have not been able to break out beyond the 20 EMA.
What makes the situation even worse is the dip below the 200-day moving average (MA). The recent bullish sentiment revival has not done enough to galvanize buying activity. Amid a market-wide retracement, sellers managed to keep upsides limited for Tangle’s native crypto token.
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The sentiment around the coin is so weak that even after forming a double bottom post the May 19 crash, IOTA bulls couldn’t push up the token higher. A double bottom is a technical setup in which assets undergo bearish pressure twice after attempting recoveries but eventually move up higher with subsequent green candles.
IOTA Bull Flag
While things may look overly bearish for IOTA, a few things make up for a silver lining. For starters, the pair is trading within a bull flag formation post the double bottom breakout failure. In technical setups, bull flags are generally followed by significant upsides.
Plus, the IOTA/USD pair is entering the classic Bollinger Band squeeze. A sustained Bollinger Band squeeze always leads to a breakout. In this case, the flight could bring prices up north.
RSI (Relative Strength Indicator) at 43.6 and MACD (Moving Average Convergence Divergence) at -0.2 on the daily chart also point to oversold conditions.
For IOTA to experience renewed bullish momentum, buyers would need to push prices past the 20 EMA first and then aim for a breakout above the $1.42 resistance level and flip it into support. After taking out $1.42, if bulls can sustain the upward action and touch $1.5, things for IOTA will genuinely start looking bullish.
