- IOTA price has dived by 40% from its highest level in December 2023.
- Other altcoins like Solana, Avalanche, and Bonk have also tanked.
- This is a situation known as buying the rumour, selling the news.
IOTA price has nosedived in 2024, erasing some of the gains made in 2023. The token has retreated in the past seven straight days to trade at $0.2200, its lowest level since November 29th. It has plunged by about 40% from its highest point in 2023, bringing its total market cap to over $693 million.
Why is IOTA plunging?
IOTA, one of the biggest players in the crypto industry, has come under intense pressure in the past few weeks. A closer look at the industry, however, shows that it is not alone. Bitcoin has retreated from $46,000 on Monday to $43,000.
Similarly, other popular tokens that jumped last week like Avalanche, Solana, Gala, and Injective have also retreated. Avalanche’s AVAX has fallen by over 36% from its highest point in December. Similarly, Solana has dropped by more than 31% from the 2023 highs.
There are three main reasons why IOTA and other cryptocurrencies are falling. First, as I wrote on Bitcoin Cash, this is a situation known as buy the rumour, sell the news. In this case, IOTA and other coins rose as traders anticipated a spot Bitcoin ETF approval.
Now, they are selling their holdings in anticipation that the approval will happen this week. Media networks like Reuters and Bloomberg have confirmed that the SEC will likely approve the funds now that companies have put in measures to prevent manipulation.
Second, IOTA price has crashed because of the ongoing war in the Middle East. Because of the ongoing Houthi attacks, global shipping costs have risen sharply in the past two weeks. Shipping companies like Maersk and Hapag-Lloyd have been forced to go round the Cape of Good Hope.
Oil prices have also jumped sharply in the past few weeks, meaning that inflation will likely remain higher for longer. Coupled with the strong jobs numbers, this means that the Fed could delay its rate cuts.
Finally, IOTA price is retreating as inflows in Shimmer EVM slows. Data compiled by DeFi Llama shows that the Shimmer EVM Total Value Locked (TVL) stands at $4.3 million and has barely moved in the past few months.
IOTA price forecast
Technically, IOTA token is falling after it formed a double-top pattern at $0.3285. In price action analysis, this is one of the most bearish signs in the market. It has now moved below its neckline at $0.2490, the lowest swing on December 11th and December 18th.
IOTA token has crashed below the 50-day moving average but is still above the 200-day EMA. The Relative Strength Index (RSI) and the Stochastic Oscillator have pointed downwards and are nearing the oversold level.
Therefore, I suspect that the IOTA token will remain on edge in the next few days and then it will bounce back and retest the resistance at $0.2490. More downside will be confirmed if it moves below the 200-day EMA at $0.20.
