Neo testing major trendline
When it comes to the non-Bitcoin crypto coins out there, it’s not a huge surprise that they have underperformed. That being said though, it’s very likely that we are going to continue to do so, because quite frankly this isn’t the same as it was a few years ago. After all, the crypto bubble popped and wiped out a lot of people who placed a significant amount of money into anything involved in the sector. However, that isn’t to say that crypto is done, or that smaller coins can’t rally.
There is a major support line just below current pricing in Neo, which has been reliable going back several months. Because of this, we could get a bit of a bounce from here, especially considering that the $10 level is just below. Because of that, if we are going to bounce it’s probably going to be here. That being said, if we do not bounce and we break down below the $10 level, that is in fact a very negative sign. In fact it could open up the market to reach down towards the eight dollars level next.
It should be noted that the moving averages are dropping lower, so at this point it’s very likely that there is still a certain amount of negativity. The question now is whether or not crypto, and especially the smaller crypto coins, are going to be immune to US dollar strength overall. After all, when you look at the Forex world, the US dollar has been rather strong.
The potential targets in both directions can be mapped out based upon previous action. This is one of those things that makes trading much easier. The $10 level being broken to the downside opens up that move to the eight dollars level, and then possibly the $7.50 level. Under there, I would anticipate seeing a major support level closer to the $5 handle. To the upside, I believe that the market will initially target the red 50 day EMA, which is currently just above the $12.50 level. After that, I suspect that the market will probably go looking towards the $15 level, an area that features the 200 day EMA currently. That would be a bit tight, but it would also follow the overall grind higher we have seen since the end of 2018.
At this point, simply waiting for the market to show you which direction it is going to go is the best way to trade it. You will need to be patient, and that’s going to be especially true considering that the market has been rather quiet as of late. However, we should get a rather impulsive candle soon, that is much longer than the previous few days. When we get that catalyst, that tells us where the market is trying to go to, and then we simply look for those targets mentioned previously. Remember, this is in Bitcoin. That means that it could move rather radically, so do take a bit of caution with your position size.
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