Today the market is in green and with some significant gains ranging on average around 20%. As reported by Cryptovest the sudden recovery was caused by the new influx of the dollar-backed stablecoin cryptocurrency Tether.
The Tether (USDT) asset finally stemmed the market slide yesterday, as a total of 90 million USDT hit the markets. There was no new printing, but only a movement of funds from the treasury. In an earlier transaction on Tuesday, Tether sent out 50 million tokens, followed by another tranche of 40 million tokens a few hours later.
This shrank the treasury to around 435 million USDT, still a formidable amount. The effect of the injections in the past few days was to stem the slide in the markets, and cause Bitcoin (BTC) to recover, along with all other coins and tokens.
One among those gainers is IOTA which has increased by 19.54% at the highest point today reaching $0.485 from yesterday’s low at $0.4 as the cryptocurrency market recovers from $191B to $205B.
As the price has retraced since to retest the horizontal support level at $0.4573 which is the upper level of the support area lets see where the price is likely heading next.
Looking on the daily chart I have labeled the two most significant horizontal support levels which are the upper and the lower support level of the support zone.
First is the mentioned $0.4573 level and second lower support is at $0.3144 which can be seen on the daily chart below.
Currently, the price has bounced above it leaving a wick on the daily chart which indicates that the price has entered buyers territory. As you can see I have labeled this correction as a WXY correction and the current wave is the final wave Y.
Zooming into 4-hour chart we will further inspect the Y wave to conclude how much more of the wave movement is to be expected before it ends.
As you can see wave Y consists of a minor degree wxyxz correction and the current wave that is developing is the final Z wave.
Finally, we are now going to look at the hourly chart to further inspect the Z wave as it looks like the price one more low before the correction ends.
As you can see from the hourly chart the final Z wave has only developed the initial wave so I from here I would expect as short-term recovery and have projected the B wave to $0.664 where the 0.5 Fibo level is. After that, I would expect another impulsive wave to the downside to the support area’s lower support at 0.3144$.
Technical indicators up to 1-hour chart are signaling a buy while higher time frame charts a bearish.
The current recovery in the market was caused by the new influx of the dollar-backed cryptocurrency Tether. This is important to know because that means that the demand could be fake and I think this a calculated move by Tether as the cryptocurrency increased in rank and is currently at number 9.
My analysis and both technical indicator are pointing out that this recovery will be short-lived. Considering the release of Tether which was released into the market because there is the demand for it but for investors to sell their crypto holdings these ‘better prices’ will serve as a great breakeven level for those who bought around $6000 level for Bitcoin and another sell-off will commence.
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