NEO previously broke below an ascending trend line against bitcoin, signaling that a longer-term downtrend is in order. Price is now trading inside a descending channel and has just bounced off the resistance.
The 100 SMA is above the longer-term 200 SMA on the 4-hour time frame, though, so the path of least resistance is still to the upside. In other words, there still could be a chance for the uptrend to resume. Then again, the gap is narrowing to signal weakening bullish momentum. Price is also trading below the 200 SMA dynamic inflection point to signal that sellers are taking over.
RSI is approaching oversold levels to reflect bearish exhaustion, and turning higher could draw buyers back in. Stochastic also made its way out of the oversold region to suggest a return in buying pressure. In that case, a pullback to the broken long-term ascending trend line could take place.
If the downtrend carries on, the Fib extension levels on the 1-hour chart could serve as the next downside targets. The 50% extension lines up with the swing low at 0.008020 then the 78.6% level lines up with the descending channel support. The full extension is located at 0.007740.
The 100 SMA is below the longer-term 200 SMA on this time frame to signal that the path of least resistance is to the downside or that the selloff could carry on. RSI is turning lower to show that sellers hve the upper hand while stochastic is heading south as well.
Both cryptocurrencies have had their share of ups and downs lately but bitcoin’s dominance in the market has rendered it more bullish. Recall that Warren Buffet had some negative remarks on the cryptocurrency but so far, it seems to be recovering from the slide.
There are no major catalysts scheduled from both NEO and bitcoin in the next few days, but there have been a few updates that could favor the latter.
*The market data is provided by TradingView.