NEO Gathers Steam as Crypto Markets Recover from Sharp Pullback
Neo (NEO), the so-called Chinese Ethereum, led a broad recovery in the cryptocurrency market on Monday, as digital assets rebounded from a sharp pullback over the weekend. While NEO has benefited from the broad market uptrend of 2019, a lack of fundamental drivers could weaken further rally attempts.
NEO Price Update
The NEO price peaked at $10.95 on Monday, according to CoinMarketCap. It has since consolidated at $10.85, having gained 4.4% for the day. The cryptocurrency is up more 43% this year but is down almost 20% from its peak.
Via the Bitfinex daily chart, we can see NEO recovering from a broad pullback at the start of the month. This fall zapped the momentum from the NEO trade, as evidenced by the relative strength index (RSI) and MACD indicators. At 48, the RSI conveys weak underlying momentum. Price action has improved considerably since the start of the year, with NEO pushing well north of the 50-day moving average.
NEO Post DevCoin
It has been more than two months since the NEO Foundation held its second annual DevCon. Unlike the first developer conference, which focused on initial coin offerings, the second gathering prioritized development and growth for projects leveraging the Neo blockchain. Founder Da Hongfei said Neo was still on track to become the leading blockchain developer community by 2020. This vision is independent of how the NEO token is trading or will trade over the course of the year.
DevCon provided an update on the development path of the Neo blockchain. Da indicated that Neo will probably need a hard fork sometime this year as well as other important changes to achieve higher scalability. Read more: Investing Idea: NEO.
Since DevCon, Neo hasn’t been in the headlines and has lacked the positive news cycles as other major projects. Its market cap ranking is little changed since the beginning of the year and is down three spots since the start of 2018.
“The basis of Neo’s smart economy is digital assets, digital identity and smart contracts. The platform enables developers to digitize physical assets in an open, transparent manner free of any third parties. The platform allows physical assets to be linked with their digital counterpart fairly easily and offers asset protection through validated digital identity. Every person or entity working on the Neo blockchain is required to have a verifiable digital identity.” – Hacked.com (April 11, 2019).
Neo’s centralized approach has made it quite popular in mainland China, especially among policymakers who want a top-down approach to the new technology. So while Neo doesn’t necessarily fit the bill of a decentralized platform, it offers the potential of a strong return on investment should blockchain adoption and development takeoff in China.
The Chinese remain highly active in the blockchain space despite blanket bans on crypto trading and initial coin offerings back in September 2017. The People’s Bank of China (PBOC) has already filed dozens of blockchain patents with the State Intellectual Property Office (SIPO). As of June 2018, the patent submission count was 41. Read more: People’s Bank of China Research Lab Has Filed 41 Cryptocurrency Patents So Far.
An investment in NEO the token should therefore be seen as an investment in the future of cryptocurrency adoption in China.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.