IOTA has broken below its head and shoulders neckline to confirm that a selloff is underway. This chart pattern spans 1.8000 to 2.6000 so the resulting selloff could be of the same height.
The 100 SMA has also crossed below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, the selloff is more likely to resume than to reverse from here. The moving averages could hold as dynamic resistance levels as well.
RSI is on the move down to show that sellers have the upper hand while stochastic is also heading south so IOTA could follow suit. However, both oscillators are dipping into oversold levels to reflect bearish exhaustion. A return in buying pressure could lead to a pullback to the neckline.
Dollar demand has been in play for the most part of the week despite a few data misses. Traders have focused on the pickup in price levels reflected in the April retail sales report, spurring stronger tightening expectations for June.
To top it off, persistent geopolitical risks appear to have favored the safe-haven dollar, even though any potential trade war with China could wind up having repercussions on US growth. There are no major reports from the US today so sentiment could prevail.
As for IOTA itself, there have been some positive developments, such as the collaboration with Kontakt.io and the recruitment of two new members, Andrea Villa and Dyrell Chapman, to assist in expanding and improving their current offerings.
Its collaboration with Kontakt will enable tamper-proof and chargeable readings of smart sensor data, something useful for healthcare operators and supply chain firms which monitor environmental conditions for compliance reasons.
Keep in mind that a number of big companies like Microsoft have ongoing projects with IOTA, which could rive the machine economy and lead to a big boost in price down the line.