IOTA/USD Technical Analysis (18 Dec 2017) – Symmetrical Triangle Breakout


IOTA/USD is expected to break out of the symmetrical triangle after twelve days ranging from the all-time high of $5.58 to $3.00.


Today’s objective is to introduce another unique cryptocurrency asset which was ignored and under evaluated for so long.

Fundamental analysis

What is IOTA and why you may consider investing?

“The main innovation behind IOTA is the Tangle, a revolutionary new block less distributed ledger which is scalable, lightweight and for the first time ever makes it possible to transfer value without any fees. Contrary to today’s Block chains, consensus is no-longer decoupled but instead an intrinsic part of the system, leading to decentralized and self-regulating peer-to-peer network.”

Transfer value without fees. What? That cannot be true, or is it? BTC already has insane transaction fees so how can another cryptocurrency achieve this and be the only one in the space to do so? I’m not going to go deeper into what Tangle is or how it works since it is not the purpose of this article, instead, if you are interested in this technology, please take some time and read the Whitepaper from here:

Past performance

IOTA has been trading for some time, and till recently, it has been largely ignored. Let’s take a look at IOTA/USD 1D time frame.

IOTA/USD – Chart 1

On the left-hand side, we have a previous market cycle performance of this asset where it achieved the all-time high price of $1.10. Quite modest performance, giving the potential of this technology.

On the right-hand side, we have the current performance with the uptrend swing about to make another big move with the temporary all-time high at $5.58.

At first glance, the previous performance looks like a small hill than a giant mountain. The current price is five times higher and we are only on the fourth wave which we will discuss more later.

Tip: Plan your trades before pulling the trigger.

Current performance

IOTA/USD – Chart 2

Looking at below 4 hours chart the breakout is imminent, and it comes with a very know pattern: Symmetrical triangle.

The idea in this pattern is that price will range between some upper and lower boundaries until it finds an equilibrium, formed by two intersecting trendlines of similar slope converging at a point called the apex. The statistics shows us that for such a pattern the profit target is almost the same height as the triangle itself. Looking at our chart we calculated the Trend Base Fibonacci Extension and we got $7 as the possible target. Not bad is it? The loss/reword ration is 3:1. The stop loss could be placed at $3.40 which is also a fractal level.

IOTA/USD – Chart 3

How confident are we to say that the breakout is going to continue the uptrend and not going to be another bull trap.? Well, looking at the two-hour chart using the Ichimoku system, we can see that we have the Tenka-sen and Kijun-sen crossing over with Tenka-sen above Kijun-sen which is a bullish signal. The MACD indicator just crossed towards the positive values which supports upper movement. The RSI is not giving us the best signal, since it is about 60 which indicates that soon the price is going to become oversold, This can indicate that a correction is about to occur soon.

 Tip: A fractal is a recurring pattern that can predict reversals. A bearish turning point occurs when there is a pattern with the highest high in the middle and two lower highs on each side. A bullish turning point occurs when there is a pattern with the lowest low in the middle and two higher lows on each side.

Future performance

What can we expect to happen next with the price of IOTA? Let’s find out from the below chart:

IOTA/USD – Chart 4

By studying the charts, we can see that the price is moving in so-called waves. This was first described by Ralph Nelson Elliott (1871–1948). Market prices alternate between an impulsive, or motive phase, and a corrective phase on all time scales of the trend. What does this mean for us? As we have seen at smaller scales, every upswing has a price correction, and when volatility is too high, the same happens on a bigger scale. After the price reaches a certain value, a correction must happen before the next uptrend starts.

We describe the bigger scale market cycle as a cycle composed of 5 waves. As we can see from above chart, not long ago the fifth wave started. You may think that the last wave is the longest, but this is not true every time, and statistically the third wave is shown to be the longest.

Tip: Stop overtrading. Don’t pick tops. Manage your trades with no regrets.

Key areas to watch for:

  • the red line resistance as profit taking targets
  • a strong continuation move to the upside tomorrow and break of the resistance at $4.25
  • Tenka-sen and Kijun-sen crossing over for an uptrend run confirmation
  • Near-term resistance at $4.75, $4.95, $5.15 and $5.55.
  • Those interested in picking up a position in POWR may consider buying at $4.25 or wait for a 50% – 60% correction and buy after consolidation.
DISCLAIMER: Investing or trading in digital assets, such as those featured here, is extremely speculative and carries substantial risk. This analysis should not be considered investment advice, use it for informational purposes only. Historical performance of the assets discussed is not indicative of future performance. Statements, analysis, and information on blokt and associated or linked sites do not necessarily match the opinion of blokt. This analysis should not be interpreted as advice to buy, sell or hold and should not be taken as an endorsement or recommendation of a particular asset.

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