The neo-US dollar (NEO/USD) exchange rate is showing signs of renewed life today.
As a China-based project, neo (formerly antshares) perhaps bore most of the brunt of the decision by the country’s regulators to ban initial coin offerings (ICOs), falling nearly 40% over the day’s trading on September 4. However, neo appears to now be recovering, posting a strong 10% gain today amid a dull market.
A general purpose blockchain designed to run smart contracts, and available in languages C#, Java and Go, the neo token topped out at $58.50 in mid-August and fell to a low of $13 on September 15. The ensuing recovery in cryptocurrencies has helped neo, issued in a 2016 ICO, regain poise.
Week-on-week, neo is up 21%, and though lightyears from its record highs, this marks a notable improvement on its 36% decline over the last 30 days.
That said, volumes remain low and below the 30-day average. As such, the positive momentum seen today needs to be maintained as price rise would boost confidence among investors about neo’s long-term viability. A sustained rise could end up being a self-feeding cycle.
Price action analysis says the rally seen today could be extended to $30 levels in the short-term.
Bullish falling channel breakout
A falling channel or a descending channel is the price action contained between two downward sloping parallel lines. An upside break is usually a confirmation of bearish-to-bullish trend change.
In neo’s case, an upside break of the falling channel looks like a done deal.
The 14-day relative strength index [RSI] is nicely curled up in favor of the bulls.
The chart above also shows a nice higher lows formation along the 100-day moving average
- Neo looks set to test the 50-day moving average level of $30. A break higher would open doors for $45.
- On the downside, only an end of the day close below the 100-day moving average would abort the bullish view.
Ancient coins via Shutterstock