In September, the IOTA foundation launched the first decentralized marketplace in the world with the goal of increasing interconnectivity between people.
On September 6, the IOTA price began a rapid increase — at one point, having increased by 40 percent relative to its beginning-of-month prices.
The IOTA price looks to have created a support area around $0.265. The positive movement of the moving averages (MAs) makes it likely that the price will continue to increase towards resistance.
Cryptocurrency trader @CryptoMichNL outlined a support and resistance area for IOTA — suggesting that the price will retrace towards support before increasing to resistance. The support area is found near $0.26 while the resistance at $0.33.
This one has seen a nice rally of 66% towards the range high.
Looking for potential S/R flips for a potential long here.
— Crypto Michaël (@CryptoMichNL) October 22, 2019
Furthermore, he suggested that he is waiting for an S/R (support/resistance) flip in order to potentially go long.
Let’s look at the possibilities and the risk-to-reward ratios for this potential long.
IOTA Price: Support & Resistance Areas
Looking at the IOTA price movement, we can identify two support areas — one at $0.265 and the other at $0.255. Conversely, the resistance areas are found at $0.315 and $0.335.
As stated in the initial image, the $0.265 support area has flipped from resistance to support. The price has been trading above it since it broke out in late September.
Additionally, the price is likely following an ascending support line — which could possibly have a slightly different slope because of the significant presence of long lower wicks.
Looking at the daily chart, we can see that the IOTA price has finally moved above the 100-day MA — which provided resistance throughout the September upward move. Also, the 50-day MA is moving upward while indicating that it will make a bullish cross.
This makes us believe that the IOTA price is likely to move upward while increasing at the rate predicted by the support line.
As stated in the beginning, the support/resistance flip might allow for initiating a potential long.
Doing so at the support area at $0.265, with a stop below $0.26 and the resistance area at $0.315 as a target, gives a 3.7 R:R ratio.
[Editor’s Note: We are not advocating taking a long position. This is merely an analysis of the risk-to-reward ratio, in case a long is initiated.]
Do you think IOTA will reach the resistance area? Let us know in the comments below.
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.
Images courtesy of Twitter, TradingView.