IOTA (MIOTA) continues to trade in a downtrend. The price has once again met heavy resistance after a recent Bitcoin (BTC) induced pump. The price received a significant boost but resistance at the downtrend line for IOTA/USD made it clear that the price is not in the clear yet and further downside is likely. The squeeze momentum also indicates that yesterday’s Bitcoin (BTC) short squeeze had little impact on IOTA (MIOTA). The price is currently trading above its RSI on the daily chart but weakness can be seen as the EMA alignment continues to remain bearish with no signs of a reversal at this point.
Current price action for IOTA/USD shows that the price has to fall back to a new low for a reversal to kick in. If overbought conditions did not prevail on the 4H chart, there might have been a possibility that IOTA/USD could have broken out of the downtrend and turned this rally into an actual reversal. However, the fact that the price has met a strong resistance at the downtrend line coupled with short term overbought conditions signal that the price will fall from these levels. Just as the rally signaled some FOMO leading buyers to believe that this was a reversal, a rejection at these levels will have the exact opposite effect but of similar magnitude. It is pertinent to note that a fall from here will be more aggressive as overall market sentiment still remains heavily bearish despite the recent pump.
A rejection at the downtrend line sets the stage for a bearish setup as investors are convinced that the price lacks positive bullish momentum for a reversal at this stage. This gives bears the confidence to put sell pressure on the price and pull it downwards. However, one important consequence of a continued retest of the downtrend line is that the more IOTA/USD tests the downtrend line, the more likely it is to break it. Moreover, the lower the price falls, the easier it gets for the downtrend to be broken as the range tightens. With a falling volume as in the case of IOTA (MIOTA), a falling price means little effort is required to break the downtrend.
IOTA/USD faces strong resistance at the downtrend line as can be seen on the 4H chart above. The RSI has fallen below its EMA on the 4H chart and is expected to fall further. This would likely drag the price down to $1 or lower near term. EMA alignment for IOTA/USD on the 4H chart is indicative of a reversal setup but overall technical indicators do not favor a reversal at this point. The 50EMA is trying to break above the 100EMA short term but it is unlikely to hold for long. Wave trend for IOTA/USD favors a strong decline to lower levels in the days ahead, which means that it is likely for IOTA (MIOTA) to see new lows for the year before the end of July.