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IOTA Price Analysis: More Bearish Signals?

IOTA is trending lower against the dollar after previously breaking below a symmetrical triangle consolidation pattern. Price is forming another short-term consolidation pattern at the moment and it looks like a bearish flag signal.

IOTUSD was rejected on its test of the descending channel resistance visible on the 4-hour time frame and might have its sights set on the next support levels. At the moment, price is testing the swing low around 1.3420 and the 38.2% extension.

Stronger selling pressure could take it down to the 50% extension around 1.1153 or the 61.8% extension at 0.8828. A test of the channel support could also hit the 76.4% extension at 0.5952 or the full extension at 0.1304.

The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. These moving averages are slightly above the channel resistance to add to its strength as a ceiling in the event of another test.

Stochastic is pulling up to show that buyers are ready to regain control of IOTA price action. RSI also has some room to climb, so bullish momentum might still return. However once both oscillators hit overbought levels and turn lower, selling pressure could pick up again.

Dollar weakness came in play after US Secretary of State Tillerson was fired by US President Trump. This brought back fears of protectionism, especially since Trump emphasized his plans to impose higher tariffs on China soon after.

Then again, cryptocurrencies are under pressure thanks to recent headlines on regulation and security issues. To top it off, IMF head Lagarde also spoke about the use of  cryptocurrencies to facilitate illegal and terrorist activity, calling upon encryption experts help “fight fire with fire.”

Even so, IOTA co-founder Dominik Scheiner remains optimistic that more partnerships can be created in the digital asset industry, heralding the “next growth cycle” for IOTA. Schiener founded IOTA alongside David Sønstebø, Sergey Ivancheglo and Serguei Popov in 2015.

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IOTA Price Analysis: IOT/USD Trying to Sustain Its Breakout

IOTA broke down from a symmetrical triangle chart formation to signal that bearish pressure is picking up. The chart pattern spans 1.2000 to 2.6000 so the resulting selloff could be of the same height.

The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside. However, the gap is pretty narrow so a downward crossover could still ensue and draw more sellers in.

Stochastic is on the move down to show that selling pressure is present. RSI is also heading south but is dipping into oversold levels to indicate that bears are getting exhausted.

In that case, price could still bounce back to the broken triangle support for a quick retest before resuming the drop. A return in bullish pressure, however, could lead to a move back up to the triangle resistance or the 2.0000 major psychological level.

The dollar has gained ground versus higher-yielding counterparts such as stocks and commodities when risk aversion returned on fears of a trade war. Although some US officials sought to reassure markets, the announcement of Cohn’s resignation revived protectionist concerns.

Recall that Trump recently announced plans to impose higher tariffs on steel and aluminum imports, likely resulting to retaliation from US trade partners. Cohn has been one of the advisers pushing for a more diplomatic in tackling these trade issues and it’s likely that his resignation was a result of disputes on tariffs.

Rumors that IOTA could launch beta testing of smart contracts could prop the cryptocurrency back up, though. However, there have been emails leaked that would have had repurcussions for IOTA had they contained any substantial proof of vulnerability.

In a tweet, Dominik Schiener clarified:

“As an organization, we have tried to stay out of the DCI controversy, and leave it to the individuals involved to lead the discussion. However, there is one public clarification to make: no Foundation member was involved in the email leaks in any way.”