IOTA Surges 43% Following Announcement
IOTA Surges 43% After Iota Ecosystem DLT Foundation Approval in Abu Dhabi
The cryptocurrency market experienced a surge on November 29, with IOTA, an open-source distributed ledger and cryptocurrency focused on the Internet of Things (IOT), seeing a 43 percent increase. This surge came after the establishment and approval of the Iota Ecosystem DLT Foundation in the BAR capital Abu Dhabi, making IOTA the first DLT organization regulated by the Abu Dhabi Global Market (ADGM).
According to press releases from the project, $100 million of IOTA was allocated to the foundation for a four-year period, leading to increased investor interest in the asset. Historically, the ecosystem and developer incentives provided by blockchain and DeFi protocols tend to drive participant sentiment, as seen in the cases of AVAX and Arbitrum projects.
However, some are questioning whether IOTA’s price action is merely a sell-the-news event. Crypto derivatives data provider Coinalyze pointed out that IOTA’s “funding rate and long/short ratio” are at “historical lows,” indicating a potential crowd sentiment and positioning.
Traders view a low funding rate as reflecting a crowded open position, suggesting that positive news or a price event could drive a rapid price reversal and force short-term traders out of their positions. Coinalyze’s chart, compared to a standard candlestick daily chart, seems to reflect this dynamic, especially on November 29th, with a high volume candle buying.
Before the latest price break, IOTA was trading at its lowest level in the last few years, as shown on the weekly chart. The lack of investor interest in the project was evident. Cryptocurrencies have a history of price increases related to mainnet upgrades, multi-chain expansions, funding announcements, and developer incentives, leaving the question of whether this also applies to IOTA. Only time will tell if IOTA can sustain its recent surge.
