Neo (NEO) price may gain over 70% on this chart pattern

Neo (NEO) price may gain over 70% on this chart pattern
Written by:
Michael Harris
26th September, 16:32
Updated: 26th September, 16:33
  • NEO price is enjoying a great month as it gained to log 2-year highs at $25.90
  • Neo Foundation is planning to use its roughly 42.24 million NEO holdings to mint FLM tokens
  • A break of $21.00 activated the double chart pattern as bulls target a move to $36.00

Neo (NEO) price is enjoying a great month as it gained to log 2-year highs at $25.90. After breaking the $21.00 handle, the buyers activated a double bottom chart pattern which may push the price action to $36.00 in the coming months. 

Fundamental analysis: Neo to acquire FLM tokens

The Foundation said it doesn’t plan to use the majority of its NEO holdings to amass FLM tokens in the course of the Flamingo Finance Mint Rush. The foundation wants to accumulate a “minority share” during the Mint Rush, scheduled to begin on September 25th.

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Concerns emerged recently in the Neo community that the foundation is planning to use its roughly 42.24 million NEO holdings to mint FLM tokens. The community expressed its concerns about an unjust FLM token distribution to NEO token holders, or that the foundation may capitalize on coffers created to support the development of the Neo ecosystem.

Yuan Gao, head of marketing at NGD, said that Neo Foundation plans to use only a percentage of its holdings to take part in the Mint Rush, rather than use the majority.

“The Neo Foundation won’t stake all of its NEO into [Flamingo]; there is too much. It doesn’t make sense for the Foundation to mint most of the FLM because it’s a [decentralized finance] project, and won’t work that way if one party takes the majority stake of the token. So, the Neo Foundation is going to have a minority share.”

He said the foundation wants to acquire FLM for two main reasons. First, the foundation wants to offer liquidity to Flamingo’s new Swap module, an on-chain exchange. In order for the Swap module to operate, it needs an accessible pool that includes NEO, GAS, NEP-5, and other supported tokens to trade. 

The second reason is that NF plans to take part in future voting and management processes, in which FLM tokens have an essential role. Neo Foundation and Neo Global Development will govern the Flamingo project directly in its early stages. 

However, the plan is to pass the management responsibility to the community, which will decide on the further direction of Flamingo through a decentralized autonomous organization (DAO) administration model. 

Technical analysis: Double bottom chart pattern

NEO/USD price is currently in the correction mode after gaining over 16% last week to trade above the near-term resistance at $21.00. This is also a neckline of the double bottom chart pattern, which has a measured target at $36.00. The pattern is now activated and buyers will look to push the price action towards this milestone.

NEO/USD price daily chart (TradingView)

Looking in the short-term, the price action has now returned lower to retest the broken resistance, which now acts as support. Hence, this is an opportunity for the new NEO buyers to get on the long side and place their stops below the support line. 

Summary

NEO/USD has activated the double-bottom chart pattern at $21.00, and the bulls will now aim to complete the formation at $36.00. In the meantime, the Neo Foundation said it will use only a minor percentage of its NEO tokens to accumulate FLM tokens during the Flamingo Finance Mint Rush.

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