NEO Struggles To Take Off With Bitcoin On Its Back
NEO, the renowned ‘Chinese Ethereum’ platform, is finally gathering support for a long-awaited reversal, after a month of poor performance.
At first glance, indicators are favoring the current advance, however, with #1 cryptocurrency by market cap in the red, it’s likely we’ll see NEO’s bullish price action inhibited until BTC stabilizes.
In the 4hr chart above, we can see NEO found the bottom at 6,700 Sats and centralized into a bullish pennant before breaking out.
It’s now gathering support to attempt a second breakout above the channel at 8,000 Sats, having failed to breach it in the opening bull run.
The price action is currently resting on the interior flipping support at 7,410 Sats, which acted as a strong resistance in the earlier consolidation period. From here we wish to see volumes increase as further investment rallies behind NEO to take it beyond this section to the next test level at 8,800 Sats and eventually 9,480 Sats; this would give us a total gain of 27.94% from the interior support level.
MACD is trending above the signal line with the faster-moving average holding well above the slower average.
Momentum is looking positive on the Relative Strength Index, after a brief overbought moment in the earlier Bull Run.
We can also see early bullish indications from the Ichimoku indicator below with a Tenkan Sen and Kijun Sen convergence, the price action passing up through the cloud and the lagging Chikou Span line dissecting up through the price action.
For those that follow this particular indicator, these are all promising signs of good bullish support.
Looking above we can see a potential Elliott impulse wave forming, with the interior support accommodating the first correction wave (2) in the series.
If Bitcoin’s performance improves, we could see this pattern play out with the second impulsive motion (3) rebounding out of the channel to 9,480 Sats before correcting.
It’s likely that this projected price action would be enough to start a ‘golden cross’ on the 50/200MA which would solidify a strong reversing trend.
At the time of writing, NEO is just short against BTC at -0.05% as we see Bitcoin beginning to recover from today’s earlier losses.
This could be a promising indication of money beginning to flow back into the market after a brief withdrawal period; providing the potential support NEO needs to successfully break off the bottom and begin to trace back to its former highs above $150.
Chart indicators are showing good potential for a breakout, but we’re still awaiting stronger confirmations that NEO will have sufficient momentum to take it beyond the channel in this next Bull Run.
Any entry into NEO at the moment will be dangerous, and short-term investors looking for a more secure investment opportunity should hold out for a 50/200 EMA convergence before jumping in.
For earlier confirmations, setting your EMA values to 13/34 will track the price action much closer and give earlier warnings of reversing trends.
Check that your momentum indicators do not highlight the asset as overbought and keep an eye on your MACD moving averages to monitor market sentiment.
