Neo drifted lower on Friday as we continue to see negativity in this market. We are below the 50-day EMA, and now are threatening the $22 level. If we break down below the $22 level, then it is likely that we could go looking to reach down to the $20 level. The $20 level has been supported more than once, and it will be interesting to see whether or not it holds.
Keep in mind that Neo is far out on the risk spectrum, so you need to see an environment where people are willing to put money to work. Because of this, you need to pay close attention to stock markets, as well as currency markets. They can give you a bit of a “heads up” as to whether or not people are willing to put money into riskier assets such as Neo. The market recently had broken to the upside but then pulled back to show signs of hesitation. The fact that we have pulled back the way we have suggests that we are in fact going to go looking to reach the $20 level underneath.
It is also worth noting that we are closing at the very bottom of the candlestick, so it does suggest that we are going to drop further, due to the fact that traders are comfortable being short of the market heading into the close. That typically tells you that they are willing to hang on to the position, so it is likely that the market will simply follow right along with it.
If we were to turn around, the 50-day EMA offers resistance, and a break above there would be a bullish sign. At that point, I would anticipate that the market could go looking to the $30 level as a target, with the 200-day EMA racing towards it. Nonetheless, you need to pay attention to the larger crypto markets, because they can give us a sign as to where this market may go given enough time. Keep in mind that Neo should be approached with caution, as the market can be quite volatile. Nonetheless, it does look like Neo has enough buyers underneath that it might open up a possible range-bound trading situation. In general, $20 will determine the overall health of this market.
