AIOTA soared after breaking through the $0.45 resistance level set in August 2020. At $1.4, a record yearly high was achieved, possibly indicating a local top.
It’s worth noting that IOTA is still far from its all-time high of $6.5. Investors, on the other hand, appear to be selling the news as a technical bearish switch. IOTA interests in the decentralized Oracle solutions market.
IOTA has declared that it would take advantage of Oracle’s specialization by creating a decentralized and permissionless bridge between the digital and physical worlds. In other words, Oracles provide information from the outside world to blockchains, which can employ in smart contracts or to provide interoperability between distributed ledgers.
IOTA Oracles, meanwhile, intend to “provide off-chain data to decentralized applications and smart contracts on the IOTA network.” For example, the First Party Oracles leverages issuer (sensors) data to ensure that outside forces did not change or reformat data.
Investors Sell the News, Causing IOTA to Retrace
The aforementioned news sparked frenzy in the cryptocurrency industry, as investors hurried to get a piece of the action and profit from the surge. However, FOMO (fear of missing out) appears to have hit its elastic limit, and a correction is on the way.
IOTA is currently trading at $1.13, following a recent trend reversal. On the daily chart, the Relative Strength Index (RSI) is oversold. Thus, indicating a long-needed correction. Apart from the 50-day Simple Moving Average at $0.45, a thorough examination of the chart reveals no obvious support points. The 100 and 200 SMAs will absorb the selling pressure, allowing the avoidance of losses toward $0.3.
When noticing the TD Sequential Indicator, IOTA most certainly reached a local high and poises to retrace. On the 4-hour, a sell signal suggests a possible reversal. Note that the last three sell signals were verified, resulting in corrections of between 8% and 14%.
As a result, if history repeats itself, IOTA may fall below $1. Simultaneously, because investors are likely to have bought the news, this decrease might be severe.
During the current bull run, the majority of cryptocurrencies have reached new all-time highs. IOTA, on the other hand, is selling at a considerable discount to its all-time high of $6.5. Investors may choose to disregard the overbought conditions and drive the price above the $1.4 resistance level.
Trading above this level will prompt more buy orders, boosting investor confidence in the stock’s capacity to break through to new highs.