What Next for IOTA Following Tuesday’s 20% Surge?

MIOTA had a very strong session on Tuesday, rallying more than 20% on the day. MIOTA is the native token of an open-source distributed ledger designed to record and execute transactions between machines and devices in the Internet of Things (IoT) ecosystem, according to Investing.com.

IOTA/USD found support at recent monthly lows just above $1.0 per token, broke to the north of its 21-day moving average at $1.17 and then reached its highest level since the start of the month above $1.30. The cryptocurrency has since dropped back under $1.30 but for now continues to trade above a key level of short-term support at $1.24 and close to its 50DMA at $1.28.

A broad rally across cryptocurrency markets on Tuesday (BTC +4.3%, ETH +2.0%) saw altcoins like MIOTA outperform and spurred hopes that a thus far absent “Santa rally” was a possibility. Three days out from Christmas, MIOTA is still trading lower by about 15% on the month, though in the altcoin space, traders will be well aware that a 15% move is easily within the realm of possibility in three sessions.

MIOTA Enters Short-Term Overbought Conditions

With the MIOTA having broken to the north of key short-term resistance, short-term bullish speculators will be hoping that the cryptocurrency can continue of yesterday’s momentum and push on towards the top of the recent multi-month range in the $1.66-$1.76 area.

But the short-term bulls should be aware that short-term momentum indicators signal that MIOTA has entered into overbought territory. The 14-period Relative Strength Index (RSI) on the four-hour candlesticks rose nearly as high as 80.00 on Tuesday, well above the 70.00 level that signals overbought conditions. Thus, before the cryptocurrency can press on, some near-term consolidation might be in order.

Longer-Term Momentum Signals More Bullish

But looking at MIOTA momentum indicators on the daily candlesticks, a more bullish picture is painted. The 14-day RSI is close to neutral around 55 and the most widely used Moving Average Convergence Divergence (MACD) indicator (which looks at the divergence between the 12 and 26-day exponential moving averages) recently moved into positive territory, which has in past months been a good buy signal.

Can MIOTA HOLDers get their ATHs in 2022?

Even if MIOTA is able to rally 30% to the top of recent multi-month ranges in the $1.66-$1.76 area, that would still leave the cryptocurreny about 40% below annual highs all the way up in the $2.70s area. And those annual highs are still about 60% below the record highs printed all the way back in 2018 around $6.50.

MIOTA has a very long way to go if it is to reach record highs again in 2022. But looking at the cryptocurrency through the lens of one-week candlesticks on the logarithmic chart, there is a bull case to be made. In 2021, the cryptocurrency has formed a pennant and recently found support at the bottom of this structure.

If MIOTA can muster a bullish breakout above this pennant, that could at the very least open the door to a test of annual highs and if these were to go amid a cascade in buying interest, perhaps we could be looking at a retest of record levels.

The metaverse was a big crypto story in the latter parts of 2021, sending the likes of Decentraland’s MANA and Sandbox’s SAND to record highs. Perhaps 2022 will see a rekindling of interest in the potential of the Internet of Things and its potential to enhance augmented reality projects.