After the announcement of the establishment and registration of the IOTA Ecosystem DLT Foundation in Abu Dhabi, the local IOTA token experienced a 43% increase on November 29th. This development positions IOTA as the first Distributed Ledger Technology (DLT) organization regulated by Abu Dhabi Global Market (ADGM).
The foundation’s funding will be provided with IOTA tokens worth $100 million allocated for a period of four years. Investors perceive this announcement and financing plan as a catalyst for short-term growth. Historically, the ecosystem and developer incentives of blockchain and DeFi protocols have attracted liquidity to projects and increased market participants’ sentiment.
Following the announcement of the asset creation plans on Arbitrum, Trader Joe’s JOE token also experienced a similar increase in the months after December 2022. Currently, the Arbitrum ecosystem hosts liquidity and developer incentives, and these initiatives are in line with the recent 62% revival in ARB token price.
Crypto analysis firm Coinalyze shared a graph on November 30th showing that IOTA has historically been at low levels in terms of “funding rate and long/short position ratio.” Investors generally interpret funding rates and long/short position ratios as indicators of sentiment.
Analysts perceive a low funding rate as reflecting a heavy long position, and in such cases, positive news or price events can quickly catalyze a rapid price reversal that can drive short-term investors away from their positions. When Coinalyze’s graph is compared with a standard daily candlestick chart, especially the high volume buying candle on November 29th reflects this dynamic.