Trade Recommendation: IOTA
The IOTA/US Dollar (IOT/USD) pair started to look bearish in the short-term on May 17, 2018 when it took out support of $1.80. This triggered the head and shoulders pattern on the daily chart. The breach of support caused a waterfall event that saw the pair drop to as low as $0.8877 on June 29. The good news is the pair seems to be ready for a rally.
Technical analysis show that IOTA/US Dollar is becoming more bullish everyday. We have a few reasons to support this view.
First, the pair is carving a bottom at $0.90 support. Bulls defended this level in April this year, and it seems that they are prepared to do the same now. The pair quickly rallied to $1.2579 after dropping to this price area in late June.
On top of that, we can see IOT/USD gathering momentum on the daily RSI. The firm resistance that has kept the market bearish in the last two months has been taken out and converted into support. Currently, we can see the RSI bouncing off of this support level.
Lastly, the pair appears to be in the narrowest point of a falling wedge pattern. With bulls showing resolve in defending $0.90 support, it looks like IOT/USD will breakout of the pattern in the coming days.
The strategy is to buy as close to $0.90 as possible. As long as bulls stay above this support, they will attract the momentum needed to climb to our initial target of $1.33.
The process may take less than a month.
Daily Chart of IOT/USD on Bitfinex
As of this writing, the IOTA/US Dollar pair is trading at $0.9913 on Bitfinex.
Summary of Strategy
Buy: As close to $0.90 as possible.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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