In only two days, a little-known cryptocurrency called IOTA doubled its price and stormed to the fifth largest market cap. Should you add this new kid around the block to your portfolio? Read on!
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What is the Heck IOTA?
IOTA Foundation is a German non-profit firm that oversees the virtual currency. It labels itself as the next generation blockchain. The main innovation behind it is the Tangle, a revolutionary new blockless distributed ledger. It is scalable, lightweight and for the first time ever makes it possible to transfer value without any fees.
The cryptocurrency has been available for traders since Jun 2017.
What Should I Care About IOTA?
This week, IOTA stormed to the fifth largest market cap. As of December 4th, it’s trailing behind Bitcoin, Ethereum, Bitcoin Cash, and Ripple. The surge appears to be linked to the announcement of IOTA’s partnership with a bunch of corporate heavyweights, including Microsoft, Samsung, Cisco, and Volkswagen on a “data marketplace.”
David Sonstebo, IOTA’s co-founder and CEO, said data is “the new oil,” and that the marketplace project is letting firms sell data to incentivize them to share this data that would otherwise be wasted.
He might very well be right, as we also focus a lot of our portfolio assets on companies that focus on data.
The cryptocurrency saw a spike on Sunday evening, and on Monday it briefly reached 2.93 versus the USD.
IOTA Technical Analysis
While crowd psychology is a bit wilder in cryptocurrencies in general, comparing to other financial assets, let’s still take a look at the technicals to see if this new kid around the block could fit your portfolio.
Setting the resistance level at the all-time high of 2.93, we could see a pullback towards the 23% or perhaps even 38% Fibonacci retracement levels of 2.31 and 1.93 as the market bulls lose steam and turn into profit-taking. However, as the word gets around, more and more traders could jump on the IOTA train and therefore push the price to new highs above $3.
So far, on early hours of Tuesday trading, IOTA traders appear to maintain their bullish sentiment.
As the 4th point of the IDDA, you must calculate your risk tolerance before deciding on the investment strategy that is suitable for your portfolio. While IOTA seems to be a promising and fairly affordable new cryptocurrency, you must understand that investing in cryptocurrencies, in general, can involve a lot of risks.
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