The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The market data is provided by the HitBTC exchange.
Main Highlights
- NEO has experienced an underperformance during the recent market recovery, falling to the tenth position by market capitalization.n
- Many anticipate NEO’s full potential will be realized in 3-5 years, suggesting a strategy of holding through dips.n
- Analysis of the weekly and daily charts indicates potential support and resistance levels for NEO/USD.n
- Trading strategies for both long-term investors and short-term traders are outlined based on current market conditions.n
NEO currently finds itself as an underperformer amidst the ongoing cryptocurrency market recovery. It has slipped to the tenth position in terms of market capitalization, a notable shift from its previous standing.
There is a prevailing sentiment among many market participants that NEO’s true potential may not be fully realized for another 3 to 5 years. This outlook suggests that adopting a ‘hodl’ strategy, holding the cryptocurrency through current price dips, could be a prudent approach for long-term investors. 💡
To better understand its prospects, let’s examine the technical charts to analyze both its long-term and short-term potential.
NEO/USD Weekly Chart Analysis
Following its initial listing, NEO spent a considerable period trading below the $1 mark. A significant upward movement began in late May 2017, propelling the price to a high of approximately $58 by August of the same year.
Such a rapid ascent naturally invited profit-taking, leading to a price correction. The cryptocurrency managed to find support around the 20-week Exponential Moving Average (EMA) and held above it until early December.
In mid-December, NEO experienced another breakout, with its upward trajectory peaking around the $200 mark in mid-January 2018. The subsequent correction saw prices fall to a low of roughly $44 in early April of this year.
Historical price action suggests a pattern where NEO experiences strong rallies, followed by deep corrections, and then enters a consolidation phase before resuming its uptrend. 📊
In the current bearish phase, NEO appears to have completed its sharp correction. The expectation now is for a period of consolidation over several weeks, potentially followed by a resumption of the uptrend. At present, the 50-week Simple Moving Average (SMA) is acting as a support level, while the 20-week EMA is posing as resistance. 📌
Let us now identify the crucial levels on the daily chart.
NEO/USD Daily Chart Analysis
The NEO/USD pair has shown resilience by recovering from its lows. However, it is encountering significant resistance at the descending trendline and the horizontal resistance level around the $80 mark. Although the bulls managed to break above $80 on April 24th, they failed to sustain this momentum, and the price retreated below the trendline the following day.
Currently, a rounding bottom pattern is forming. This pattern would be confirmed upon a breakout and sustained close above the $80 level, projecting a target of $115. An additional potential resistance zone exists between $92.5 and $95.5. Crossing this zone could potentially propel the cryptocurrency towards the $140 level. ✅
Conversely, a breakdown below both the moving averages and the $64 support level would indicate weakness, potentially leading to a decline back towards the early April lows of around $44. ⚡
How can traders leverage this analysis?
Trading Strategies for NEO/USD
Long-term investors might anticipate a few more weeks of consolidation. However, historical patterns suggest that the next significant price movement is likely to be to the upside. Therefore, they could consider buying NEO on pullbacks, setting a stop-loss below $40 to manage risk.
For short-term traders, waiting for a decisive breakout above $85 might be a good entry point for long positions, with a stop-loss set around the $65 levels. 📍
Traders who are currently holding long positions initiated around the $64 levels should consider moving their stop-loss to breakeven to protect their capital. The cryptocurrency is currently finding support at its moving average. A confirmed bounce and a subsequent break above $85 could offer substantial rewards, making it advisable to hold the position with the established trailing stop-loss.
The market data is provided by the HitBTC exchange. The charts for the analysis are provided by TradingView.
Fundfa Insight
NEO’s current price action shows signs of consolidation after a significant correction, aligning with historical patterns that often precede an upward trend. Traders and investors will need to closely monitor the $80 and $85 levels for potential breakouts, while maintaining risk management strategies through stop-losses.