IOTA takes another step closer to its goals of becoming a decentralized distributed ledger technology (DLT) as rumblings start to appear that they are beginning to make preparations to remove their centralized coordinator node.
The move towards decentralization has been dubbed as “coordicide” and the announcement was made apparent through dedicated IOTA blog, Tangleblog.com, in the following tweet:
The coordinator node has largely been ridiculed by the cryptocurrency community as a centralizing feature of the Tangle consensus mechanism that IOTA employs, as many believe the whole premise of blockchains and DLTs is for the entire system to be trustless and decentralized.
The coordinator is designed to prevent a malicious user from gathering a third of the hashing power to attack the IOTA DLT and its integrity.
However, the coordinator also grants power to the IOTA Foundation to prioritize transactions and freeze users funds, which is the main source of disdain from the majority of the cryptocurrency community.
With the removal of the coordinator, the IOTA DLT is expected to improve in efficiency and greatly increase the amount of transactions per second capable as the network can then scale better.
Although there is no specific date as to when the coordinator will be removed, we can safely assume that it will occur at some point during 2019. The IOTA dev team just needs to be sure that the Tangle DLT will still remain as secure after the removal of the coordinator.
Let us continue to take a look at price action for IOTA/USD over the short term and highlight any potential areas of support and resistance moving forward.
Over the past 24 hours, IOTA/USD has dropped by a total of 6.60% which brings the current trading price of the token down to around $0.23, at the time of writing.
Like the majority of the cryptocurrency industry, the IOTA market has suffered a concerning 15.63% price fall over the past 7 trading days and a further 52% price collapse over the past 30 trading days.
IOTA is now ranked in 14th position in the market cap rankings and holds a total market cap value of $636 million. The 18-month old project has dropped a significant 95% since placing the all-time high price earlier during the year.
Evaluating the IOTA/USD market from the short-term perspective above, we can clearly see the severity of the November 2018 market collapse as price action fell from a high above $0.52 in November 2018 to a low around $0.20 during December 2018.
We can see that the market has reached support provided by a short-term downside 1.272 FIbonacci Extension level (drawn in blue) priced at $0.2057. As IOTA/USD has approached this area, we can notice that the price decline has slowed significantly.
The overall long-term trend is still bearish.
However, for the bearish trend to continue, we would need to see IOTA/USD breaking below the $0.2057 handle. Until then we can safely assume that the market is consolidating as it continues to move sideways whilst the market players decide which direction to head toward next.
If the IOTA/USD market breaks below the $0.023 handle, we can expect immediate support below to be initially located at the long-term downside 1.618 FIbonacci Extension level (drawn in red) priced at $0.2137.
Further support below this is then at the aforementioned support at the $0.2057.
If the sellers continue to cause IOTA/USD to break below the $0.20 handle, further support beneath can be located at the medium-term downside 1.414 Fibonacci Extension level (Drawn in maroon) priced at $0.1852, followed by the short-term downside 1.414 Fibonacci Extension level (drawn in blue) priced at $0.17.
If the buyers can regroup their effort and begin to push the IOTA/USD market higher, we can expect immediate resistance above to be located at the psychological round number handle at $0.25, followed by the bearish .236 and .382 FIbonacci Retracement levels (drawn in orange), priced at $0.2817 and $0.3281 respectively.
If the bulls can continue to climb even higher, further resistance above can be expected at the bearish .5 and .618 Fibonacci Retracement levels (drawn in orange), priced at $0.3281 and $0.3656 respectively.
Although the RSI is still trading in the bearish territory below the 50 handle, it has started to level out which could suggest that the sellers have started to relinquish on their bearish actions which may allow the market to climb higher.
If we would like to see the beginning of a market recovery, we would need to wait for the RSI to break above the 50 handle as a confirmation that the buyers have taken over the control of the market momentum.
The coordicide task is an extremely important step for the IOTA team to take in order to increase the confidence in the decentralized aspect of the network.
Investors in the cryptocurrency industry do not take kindly to centralized run projects and the removal of the coordinator will allow for the confidence in the IOTA DLT to be increased. The removal will also improve the network efficiency and scalability promise which will be added bonuses.
The IOTA/USD market is in a state of sideways movement at this moment in time.
A break below the $0.20 handle will confirm that the market will be heading further lower, but until then we must be patient and wait on the sidelines before re-entering the project without any bullish confirmations.
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