NEO bounced a couple of times off the $31 area to create a double bottom, which is often seen as a classic reversal signal. Price has yet to break past the neckline around $35 to confirm that an uptrend is underway.
If that pushes through, price could climb by the same height as the chart pattern or $4 to $39. However, the 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the selloff is more likely to carry on than to reverse. Price could still fall back to the bottoms if the 200 SMA keeps holding as dynamic resistance.
RSI appears to be pointing up to show some bullish pressure but might also just be moving sideways. Stochastic is showing clearer upside direction but is nearing overbought levels to reflect exhaustion among buyers. Turning lower could bring selling pressure back in and take NEO to the $31 support or lower.
Cryptocurrencies have had a positive run in the past few days but appear to be running out of steam on the rallies. After all, there have been no new catalysts that could prop prices higher while traders await the SEC decision on the bitcoin ETF.
But even if the regulator gives approval, the positive reaction could be limited to bitcoin itself since it has been hogging most of the gains from its altcoin peers. Besides, traders’ attention is back to stocks and commodities thanks to strong rallies spurred by the trade truce between the US and the EU.
US President Trump and EC President Juncker shook on a deal to hold off further tariffs and resolve earlier ones while they negotiate a zero-tariffs agreement between the two economies. This has been enough to spur a strong relief rally in traditional markets, so it’s understandable that traders are flocking back there to take advantage of gains.