IOTA looks ready to resume its selloff after bouncing off the top of its descending channel on the 4-hour chart. Applying the Fibonacci extension tool on this quick pullback shows the next downside targets.
The 38.2% extension is near the mid-channel area of interest at 0.8264 and could hold as near-term support. Stronger selling pressure could take IOTA down to the 50% extension at 0.6864, the 61.8% extension at 0.5463 or the 78.6% extension at the channel support or 0.3470. The full extension is located at 0.0930.
The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. This basically means that the selloff is more likely to resume than to reverse. These moving averages line up with the top of the channel to add to its strength as a ceiling.
However, the gap between the moving averages is narrowing to signal weakening bearish pressure. At the same time, RSI is prepping to climb out of the oversold region to signal a return in bullish pressure. Stochastic has a bit more room to slide before hitting oversold levels, so bearish pressure could stay in play for a bit longer. Turning higher also could confirm that buyers are returning.
Cryptocurrencies took some hits this week on negative remarks from three well-known American economists: Stiglitz, Rogoff, and Roubini. Their remarks mostly focused on how regulation could prove to be the downfall of bitcoin and its peers as people in power wouldn’t likely allow this type of transactions to continue.
Roubini also highlighted the volatile nature of bitcoin as a likely factor preventing it from being a store of value. The lack of any updates specific to IOTA rendered it vulnerable to the overall dip in investor confidence spurred by these remarks.
Another round of negative commentary like this could lead to more declines for IOTA and its peers while positive developments in the industry might be enough to temper these short-term losses.