NEO enjoyed a brief bullish pump at the start of this week as support gathered behind the new ‘Era of Decentralization’ release- but it wasn’t to last. Over the last 24 hours the ‘Chinese Ethereum’ has failed to hold on to this new ground and has already corrected -10.99% back to a key fibonacci support.
NEO’s monopoly of its network nodes has attracted a lot of criticism lately and is the likely cause of this recent decline. The newly-elected independent node, the City of Zion organization, is a group of NEO developers that have been operating a candidate node since early January 2018. There have also been discussions going forward that new independent nodes will need to be approved by existing nodes, thus removing the decentralized nature of this supposed ‘decentralized era’.
NEO Chief Executive Officer Da Hongfei maintains that this selection process is necessary to ensure that the appropriate nodes are selected for the fast-growing network.
Looking at the NEO/BTC chart over 3hr candles we can see that the asset struggled to test the 0.618 fib level at 0.0067BTC and has subsequently fell to the lower 0.5 fib support.
Despite the falling price action, we can see promising signals that bulls are about to make a strong turnaround, as the 50 EMA rises defiantly against the downtrend and is heading for a golden crossover convergence with the 200 EMA imminently.
In these situations when a moving average or momentum indicator contradicts the price action trend, it is usually a good confirmation that the asset is about to reverse.
Looking at the RSI now we can see that NEO has returned into the centre of the index channel after falling from the overbought region in the previous pump. This central position in the channel means that NEO has sufficient space to climb during the next bull run, which should happen relatively soon once enough investors gather to take on the bears.
The Ichimoku indicator is also foreshadowing a bullish continuation with a rising support Kumo stretching out in front of the price action, along with a bullish, albeit weak, T/K crossing.
NEO Price Targets
All price targets for this asset are set from the 0.786 Fibonacci support/ 0.005835BTC, where NEO currently sits.
Price Target 1: We expect the price action to reach the 0.5 fib level at 0.0073BTC when the bulls break back off the lower support. This will deliver a 26.31% return from the 0.786 fib level.
Price Target 2: The asset is likely to correct from this fib level and find new support along the 0.618 fib level below (yellow) which should act as a foothold for the next bull run. Once bulls are have rested they should begin to move again, this time towards the 0.382 fib level above at 0.008BTC. This will deliver an overall ROI of 37.16%.
Nothing in this article is to be construed as investment advice. Neither the author nor the publication takes any responsibility or liability for any investments, profits or losses you may incur as a result of this information.
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