I did a little bit of digging and I came to know that the recent slump in NEO was actually driven by NEO’s supposed “bluff”. According to those who bought the rumor, they termed this “cheating” as “ridiculous”, “inside trading” and are baying for the blood of NEO promoters who they said should be rotting in jail.
You remember that strong bullish jump on November 17? Well, this pump was a based on a rumor that NEO the company was going to make some “big announcement” and guess what? As a Chinese based company whose government has banned ICOs and everything else crypto, this supposed “big announcement” was interpreted as more than just that.
Some investors and supporters even thought this is something to do with the Chinese finally kissing the bride, blessing Cryptocurrencies and giving NEO a seat in the high table. We all know if that happens NEO will reach the moon and follow the path taken by Ethereum. After all, both of them serve the same function and sooner or later NEO will lift off now that every tiny, baseless ICO is being run on Ethereum’s Virtual Machine.
Now, after the ‘‘big announcement” ended up being a simple announcement of a new developers conference, traders and investors went berserk and dumped the coin. It was an emotional thing, a FUD to say the least. Because of this, we will follow what history says. If the failure is not systemic but emotionally induced, then the best way to make money is to fade the move. In NEO situation, we recommend buying on dips.
Irrespective of the bile, NEO is undoubtedly a solid, scalable and global platform. In my opinion, the platform needs to be marketed more for more ICOs to be initiated on its block-chain. Therefore, it’s not a matter of if it will appreciate, it’s just about when. Should it gain traction through its “digital certificate” pitch, early adopters will be smiling all the way to the bank.
Technically, the past two weekly candlesticks has been trending inside that strong bullish candlestick that broke above the main resistance trend line in the weekly chart. As we can see, as long as price action is ABOVE the wedge, we remain bullish. Then again, selling will be a bad idea because stochastic momentum are bullish, the past two bear candlesticks have long lower wick indicating bull pressure and from Fibonacci retracement and reversal guidelines, we expect prices to expand and at least test August highs of $58.
In our entry chart, we are only taking long positions because of that bullish break out in mid-November.
Notice where price action reversed from even after closing below the $34 which was our main support line.
As we can see, NEO reversed from the last support trend line connecting November lows which by the way is in an upward trend considering the general price action gradient.
There is a stochastic buy signal in place and once NEO breaks and close above the 20 period MA or the main support line at $34, then NEO bulls should have a reason to initiate longs.