On March 22, 2019, the price of IOTA reached a high of nearly $0.34. A sharp drop ensued, followed by an upward move and another gradual downtrend.
When will the downtrend end? Will the price reach $0.33 again?
IOTA Price Outlook: March 22-25, 2019
According to today’s analysis, it is likely that the price keeps trading within the descending channel defined below.
IOTA: Trends and Highlights For March 25
- IOTA’s price has been on a downward trend since Mar 23.
- It is trading inside a descending channel.
- There has been bullish divergence developing in the RSI and the MACD
- There are resistance areas near $0.314 and $0.327.
- There is support near $0.302 and $0.295.
Tracing Resistance
The price of IOTA (IOTA) on Binance is analyzed in thirty-minute intervals from Mar 22 to Mar 25.
On Mar 23, the price made a high of $0.321. A gradual downtrend ensued. Several market cycles were completed along this trend. Each high was lower than the preceding one. Tracing these highs gives us a descending resistance line.
The resistance line can effectively act as a ceiling to price, preventing further upward movement. It also projects the upper limits of price for a given period based on historical price fluctuations. Finally, it gauges the rate of decrease.
Price has been decreasing at the same rate as predicted by the resistance line.
It is likely that the price will keep decreasing at a steady rate as predicted by the resistance line.
Descending Channel
On Mar 17, the price made a low of $0.3. It has gradually decreased since, with each low being lower than the preceding one. Tracing these lows gives us a descending support line.
Similarly to the resistance line, the support line acts as a floor to price, preventing further downward movement.
The resistance and support lines combine to create a descending channel. This is generally a neutral pattern suggesting that price will fluctuate between the resistance and support. However, when the trend is facing downward, gradual longitudinal price decreases can be expected.
It is likely that the price trades within the confines of the descending channel with gradual price decreases. There remains the possibility of a breakdown below support—which would likely increase the rate of losses—or a breakout above resistance—which would lead to a likely reversal and possible rapid price increases.
Potential Breakout
Combining RSI and MACD bullish/bearish divergence with support/resistance essentially predicts price fluctuations.
The RSI is an indicator which calculates the size of the changes in price in order to determine oversold or overbought conditions in the market. The moving average convergence divergence (MACD) is a trend indicator that shows the relationship between two moving averages (long and short-term) and the price. It is used to measure the strength of a move.
On Mar 24 the price made a low of $0.309. Since then, it has continued to generate lower lows.
Similarly, the RSI and the MACD made the first low on Mar 24. However, they have continued to generate higher or identical values since.
This is known as bullish divergence and often precedes price increases.
However, it is occurring in a neutral pattern and it is not very significant in value, reducing its validity.
Using these indicators, it is likely that the price will move towards the resistance line to touch it, before possibly breaking out. However, the possibility of a breakdown remains along with the possibility that the price will continue trading within the descending channel for the foreseeable future.
Future Movement
The price of IOTA (IOTA) on Binance is analyzed in two-hour intervals from Feb 12 to Mar 18 to determine possible reversal areas in the case of a breakout or breakdown.
Resistance and support areas are formed when the price reaches a certain level several times. They can act as a ceiling/floor that prevents the price from moving further in that direction
The first resistance area is found near $0.314, followed by the second one near $0.327. If the price were to break out of the channel, these would present likely reversal areas. This scenario is more likely than a breakdown; however, a breakout cannot be conclusively determined as forthcoming.
The closest support area is found near $0.302 where the price is currently. The second one is found near $0.295. If the price were to break down from the channel or continue decreasing at the rate predicted by the channel, the $0.295 area would provide a likely reversal.
Summary of Analysis
Based on this analysis, it is likely that the price of IOTA should continue trading within the descending channel. A breakout remains possible.
A breakdown below support initiating more rapid price decreases would invalidate this prediction. Partial validation would occur if a breakout occurs imminently without continued trading in the downward channel. Full validation would occur if a breakout follows continued movement in the channel for some time prior.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.