Trade Recommendation: NEO
The NEO/Bitcoin pair (NEO/BTC) is down by over 80% from its 2018 high of 0.0152, which was registered on January 30. Just like many altcoins, this pair looks scary to touch at the moment. The fear of more downside potential has driven many retail investors away.
However, an 80% plummet in less than a year should invite you to take a contrarian stance. The market has been deeply devalued and it might start looking affordable to savvy investors. We’re starting to see this idea shape up in NEO/BTC.
Technical analysis shows that this cryptocurrency pair is positioning to take out resistance of 0.003. The breach should annihilate the large falling wedge on the daily chart and reverse the market’s trend.
This view comes as we see a significant volume build up between 0.0024 – 0.003. This tells us that bargain hunters and bottom fishers are buying in bulk. That’s because 0.0024 is the historic support of this pair. Bulls have defended this level since July 2017.
The strategy is to buy as close to the breakout at 0.003 after the market prints volume of 1 million NEO units. Those who bought the bottom might take some profits at the resistance. The pair needs buyers to absorb the selling pressure.
If NEO/BTC breaks out from the falling wedge, it is probable that it will rally to our target of 0.0054.
The process may take less than a month.
Daily Chart of NEO/Bitcoin on Binance
As of this writing, the NEO/Bitcoin pair is trading at 0.00295 on Binance.
Summary of Strategy
Buy: Breakout at 0.003 as long as the 1 million volume requirement is met.
Stop: 0.0028 after the breakout.
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.
Featured image courtesy of Shutterstock.