IOTA Pushes Up on Probable Short Squeeze
IOTA (MIOTA), one of the more established digital assets, is pushing to a higher price range after months of lagging the market. The IOTA project faced headwinds on building its network, ending up with a relaunch.
Now, the new network is aiming to regain popularity. The IOTA market price has been making moves, suggesting it can revisit its peak from 2017.
IOTA Broke Out within Days
After a month of sideways drifting under $1 and a low at $0.84, IOTA exploded within a week, to trade above $1.60.
Trading volumes burst to levels not seen in the past four years, surpassing even the activity during the spring peak of 2021. Daily activity surpassed $1B, causing IOTA to catch up with some of the more active projects. The dramatic spike in volumes surprised the markets, possibly paving the way for greater IOTA activity in the coming days.
IOTA broke out to $1.55, adding more than 23% overnight, after briefly touching $1.60. The asset is yet to regain its 2021 peak valuation above $2.60. The asset has signaled a return to prominence multiple times, but remains choppy, on a mix of low trading interest, as well as technical problems with the project.
A return to high volumes may boost IOTA at a moment when interest in altcoin performance is peaking, with projects breaking new all-time highs.
Will IOTA Experience a Short Squeeze
There is still no clear explanation of the rapid rise in IOTA. The return to volatility is linked to an attack on short positions, due to previous expectations IOTA would sink to lower levels.
So far, the short squeeze for IOTA hinges on social media rumors, which still may inform trader decisions in the coming days.
The sentiment for IOTA may shift if more traders are willing to buy and hold onto their assets.
Did IOTA Trade on a Market Anomaly
The IOTA futures market on the Bitfinex exchange may be responsible for some of the price anomalies. The IOTA perpetual futures are also a source of potential short squeeze efforts.
It is possible that some of the Bitfinex futures may have traded on incorrect information, causing trading anomalies.
The Binance exchange, which is one of the pricing information providers for IOTA, possibly sparked the trading spree.
Can IOTA be Moved to a Wallet
The recent shift to the Firefly wallet and the relaunch of the IOTA network led to problems with IOTA withdrawals from some exchanges.
Most recently, the Binance exchange renewed IOTA withdrawals, potentially reigniting demand as the asset can now be moved more easily.
In the past, IOTA relied on wallets that also faced problems with compromised seeds, and some of the funds were lost due to failing coordination between wallets.
Now, IOTA is not only available through the new Firefly wallet, but also through the Ledger Nano hardware wallet.
The greater ease of acquiring IOTA may benefit renewed adoption, with more secure sending and receiving.
Is IOTA 2.0 Coming Soon
The IOTA 2.0 launch is expected in the coming months, without a clear set date. Currently, the IOTA 2.0 coordination protocol is only running on testnet. In the meantime, the IOTA network still relies on a single server to verify the latest state of the distributed ledger.
For IOTA, centralization was supposed to be a temporary solution, but the coordinating server remains one of the last hurdles to full decentralization.
The relaunch will further increase the publicity for IOTA. The project continues to hire actively and to add new features to its testnet.
IOTA Still in NFT Testing Stage
The IOTA network has produced a MVP version of an NFT market, which launched at the end of July.
So far, there are no working NFT platforms on IOTA, and the marketplace for collectibles works on the testnet and only using test tokens. Despite the growth of the NFT market in August, IOTA is still lagging behind the trend in a real-world implementation.
How High can IOTA Go
During the late 2017 bull run, IOTA shot upward to above $5.36, only weeks after breaking above $1.
In 2021, similar levels of hype are possible, as well as a more liquid market with more pairings. IOTA is also readily available through three Binance trading pairs, which take up more than 46% of all trading activity.
The addition of more USDT tokens and new markets set the stage for a renewed period of price discovery, combined with the project’s growth and eventual relaunch to IOTA 2.0.
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