IOTA price suffers a deep reversal: is the rally over?

IOTA price experienced a sharp comeback this week, becoming one of the top 100 worst-performing cryptocurrencies.

IOTA (IOTA) has fallen for four consecutive days, reaching $0.3400, down 46% from its year-to-date high.

This pullback coincided with Bitcoin (BTC) and other altcoins typically falling sharply when the Bitcoin trend dips. Bitcoin, in particular, has pulled back from its all-time high at $104,200 as its strong rise stalled. These pullbacks are common when the cryptocurrency reaches significant levels. For example, Bitcoin fell from $73,700 in March to $49,800 in August at the beginning of this year.

IOTA’s price decline is also in line with the beginning of the counting phase for the Refounded Governance proposal that has been launched. Coin holders will be able to continue voting in this process that will last until December 16.

It marks the most significant upgrade in the history of the network, introducing new features such as IOTA Re Based, MoveVM, and Ethereum Virtual Machines.

Additionally, the upgrade brings full decentralization capabilities and the ability to process over 50,000 transactions per second. IOTA holders will also be able to stake the coin and earn annual returns of 10% to 15%.

Some crypto investors remain optimistic about IOTA’s future recovery. Andrew Moh, a popular crypto analyst, stated in an X post that the coin has better tokenomics than others.

For example, 76% of all IOTA tokens are in circulation, the coin has an inflation rate of 12%, and there is no risk capital allocation. He also believes that strong technical indicators could drive long-term growth for the token.

IOTA price analysis: will it recover? IOTA chart | Source: crypto.news

The daily chart shows IOTA peaking at $0.6280 during the excitement surrounding the Rebase upgrade. It has since erased some of those gains and fallen below the key support level of $0.4213, the high on March 14.

The cryptocurrency also fell below $0.3900, the main support and resistance pivot point of the Murrey Math Lines. In most cases, assets tend to recover after reaching these levels.

IOTA remains above the 50-day and 100-day Exponential Moving Averages (EMA), but the MACD and Relative Strength Index (RSI) are indicating bearish momentum. As a result, the coin may continue its mean reversion process and retest the 50-day EMA at $0.2440. A recovery is likely if Bitcoin returns to its all-time high, as some analysts predict.