IOTA (MIOTA) Technical Analysis: Key Levels To Watch

Now that the holiday season has ended and markets are beginning to normalize, volume should start to increase, especially in the cryptocurrency markets.

The lack of volume resulting from traders taking Christmas holiday vacations caused most of the high-flying cryptocurrencies to take a slight break from setting new all-time highs every few days and settle into a price consolidation period.

This break in market action has also given traders and investors an opportunity to take a look at some of the other, less-popular cryptocurrencies that have been quietly making rapid gains, albeit not as impressive as Bitcoin or Ethereum, but impressive nonetheless.

Furthermore, the beginning of a new year is when most investors, both personal and institutional, re-evaluate their investment portfolios and make adjustments according to current market conditions.

There’s no doubt that cryptocurrencies have garnered a great deal more consideration after the incredible gain made over 2017.

IOTA is one such cryptocurrency that is slowly gaining recognition by traders and investors alike.

First, from a fundamental perspective, IOTA’s Tangle technology solves some of the issues that blockchain technology used by some of the more popular cryptocurrencies such as Bitcoin and Ethereum, have yet to contend with scalability, processing time, and high fees.

In a “nutshell,” IOTA’s Tangle technology eliminates the need for mining, and consequently the need to pay fees to miners; therefore making it well suited for very small no-fee transactions which would otherwise not be cost effective for the end user, or the miner.

Also, by eliminating the mining process, transaction authentication is processed much faster, all the while maintaining a very high degree of security.

This will allow for the much broader application of the cryptocurrency, eventually fostering a higher demand for it.

Chart #1: IOTA Daily

From a technical Analysis perspective, IOTA is currently trading at $3.88, a far cry from the hundreds, or thousands of dollars that Ethereum or Bitcoin are presently priced at.

This makes IOTA a viable long-term investment on which a large-scale position can be taken with relatively little downside risk and a great deal of upside potential.

Unlike Ethereum or Bitcoin in which the potential downside makes a substantial investment very risky.

IOTA hit its all-time high of $5.80 on December 19, 2017.

It has since then formed a classic head-and-shoulder price reversal pattern which is very near completion (noted in Chart #1 above).

The completion of the pattern presents a win-win scenario.

At its current price, if IOTA reverses and drops in price, as head-and-shoulder usually patterns do, there’s not much downside for it to drop.

This presents an opportunity to enter long or add to existing positions, based on the aforementioned fundamental technology assessment.

If IOTA breaks through the upper key level labeled on Chart #1,  there will be plenty of future up-side potential to take advantage of.  We will be watching closely.

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.

Image courtesy of coinmarketcap.com