By Chris Hollingworth 
NEO has recently slipped to the tenth spot in terms of market capitalization as it has been lagging behind in the market recovery. Despite this, many investors believe that NEO’s true potential may only be fully realized in the next 3-5 years, making it a favorable choice to hold onto the cryptocurrency through market dips.
Let’s delve into the charts to analyze both the long-term and short-term potential of NEO.
Weekly Chart
Following its listing, NEO traded below $1 for an extended period until the price surged at the end of May 2017, reaching a high of around $58 in August of the same year. As expected after such a sharp rally, profit booking occurred, leading to a correction to the 20-week EMA, where prices held above until early December.
In mid-December, NEO broke out of the range and peaked around $200 in mid-January 2018. Subsequently, a correction brought the price down to approximately $44 in early April of this year. History shows that NEO typically experiences significant rallies, followed by deep corrections and consolidation before resuming its upward trend.
Currently, NEO has completed a sharp correction in the current bear phase, and a period of consolidation is anticipated before a potential uptrend resumption. The 50-week SMA is currently offering support, while the 20-week EMA is acting as resistance.
Daily Chart
The NEO/USD pair has shown a strong recovery from recent lows but is encountering resistance at the downtrend line and around the $80 mark. Despite briefly breaking above $80 on April 24, the price retraced below the trendline the next day. A rounding bottom pattern is forming, with a breakout and close above $80 signaling a target of $115. Alternatively, a minor resistance zone between $92.5-$95.5 could propel the cryptocurrency to $140 upon breach.
Conversely, a breakdown below both moving averages and $64 would weaken NEO, potentially leading to a decline back towards early April lows.
Trading Strategies
Long-term investors may anticipate a consolidation phase in the coming weeks before a potential upward move. Considering historical patterns, buying NEO on dips with a stop loss at $40 could be a strategy to consider.
Short-term traders might look for a breakout above $85 to initiate long positions with stop losses around $65. For those already holding positions from $64, maintaining stops at breakeven is advised as NEO finds support at the moving average. A bounce and breach above $85 could yield significant returns.
Market data is sourced from the HitBTC exchange, and the charts used for analysis are provided by TradingView.
