IOTA price soared to $0.2153 on Monday, Nov. 19, after developers unveiled the next upgrade for the distributed ledger network.
IOTA (IOTA) pulled back on Tuesday, falling to $0.1760 and nearing a technical bear market. This decline brought its market cap to $627 million, a significant drop from its record high of over $14 billion.
In a statement, the developers announced plans to launch Rebased, a new upgrade aimed at making the network more attractive to developers. If the proposal is approved, IOTA’s network will include features like full decentralization, Ethereum Virtual Machine support, and the ability to handle over 50,000 transactions per second.
These are notable improvements, considering Ethereum (ETH) processes less than 50 transactions per second while Solana handles about 2,500 TPS. The upgrade will also introduce staking, enabling users to earn returns by delegating their coins.
Rebased represents a major shift for IOTA, transitioning from a mostly centralized system with limited programmability to one with enhanced functionality.
Despite the proposed improvements, IOTA faces intense competition in the layer-1 industry, where Ethereum, Solana, and BNB Smart Chain dominate. It also contends with layer-2 networks like Base, Arbitrum, Optimism, and Polygon.
Additionally, IOTA must overcome its struggle to attract developers. Its IOTA Ethereum Virtual Machine has only drawn a small number of developers, with a total value locked of $32.3 million and just seven decentralized finance applications in its ecosystem.
IOTA price path to $1 is challenging
The daily chart shows that the IOTA token formed a falling wedge pattern before the recent rebound. This rally coincided with a broader cryptocurrency surge and positive sentiment reflected in the fear and greed index.
IOTA price has broken above the wedge pattern and climbed past the 50-day and 200-day Exponential Moving Averages. It has also retested the 23.6% Fibonacci retracement level.
Further gains could be confirmed if the token rises above the key resistance at $0.2150, its highest swing level on Nov. 18. Such a move might push the price toward the 61.8% Fibonacci retracement level at $0.2988, approximately 70% above the current price.
However, hopes of IOTA reaching $1 are relatively slim, as it would require a 466% increase from its current level.
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