The NEO/US Dollar pair (NEO/USD) launched its bull run on December 14, 2017 when it breached resistance of $45. The breakout attracted momentum traders and trend followers who helped push the market to as high as $198.20 on January 15, 2018. In a month, the market rose by over 344%! The rapid rise in value invited those who bought the breakout to take profits.
As selling commenced, the market fell to $93.53 on January 17. Bottom pickers bought the dip but they were only able to lift the market to $169.50 on January 30. The lower high suggested that bulls were out of ammunition. Savvy market participants responded by either cutting losses or taking profits. From that point, NEO generated consecutive lower highs and lower lows until recent market action.
Technical analysis show that NEO/USD may have hit the bottom on April 6 when it went as low as $44.16. This comes after the market showed signs of capitulation on March 18 and March 19. On those days, volume spiked to above 500,000 units of NEO when the daily average was less than 200,000. This suggests that some of those who bought above $60 may have surrendered their positions.
The strategy is to buy as close to $45 support as possible. If bulls preserve this support, they will likely create a base before moving to our target of $80. NEO/USD will most likely range trade for now before it can ignite a bull run.
Daily Chart of NEO/USD on Bitfinex
As of this writing, the NEO/US Dollar pair is trading at $50.08 on Bitfinex.
Summary of Strategy
Buy: As close to $45 as possible.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.