IOTA continues to trend lower against bitcoin as price completed a brief pullback from its drop. Price is close to testing the previous lows and might go for new ones to the bottom of the descending channel on the 1-hour chart.
The 100 SMA has crossed below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the selloff is more likely to carry on than to reverse.
However, stochastic is already indicating oversold conditions and might turn higher to signal a return in buying pressure. RSI has some room to fall, so sellers might not book profits until the oscillator hits oversold levels. In that case, IOTA could still bounce off the previous lows just above 0.0015 then pull back to the channel resistance around 0.00018.
Against the dollar, IOTA is consolidation mode. It has formed lower highs and higher lows, creating a symmetrical triangle pattern. Price is approaching the peak of the formation to signal that a breakout is due anytime soon.
The moving averages are oscillating so it’s hard to pinpoint which direction it could break out. RSI and stochastic appear to be turning lower to suggest that sellers have the upper hand.
A break below support around 1.9000 could lead to a drop of the same height as the triangle. Similarly, a break past the 2.0000 handle could lead to a rally of the same size. The triangle spans 1.2000 to 2.5000.
Dollar demand has tumbled against higher-yielding assets last week on fears of a trade war, but it looks like cryptocurrencies are trying to take advantage of this market situation. Bitcoin has been leading the pack, with its rivals like IOTA trailing behind.
This week, the focus could return to tightening expectations as the US will release its NFP report on Friday. Stronger than expected results could favor the dollar on stronger rate hike expectations and risk aversion all over the globe.
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