Is NEO Dead? Or Is The Bear Trap We've Been Waiting For?
Updated
Let us return to the bear trap idea I posted about a couple weeks ago. On April 16th, I speculated that we'd see altcoins continue to drop on their Bitcoin ratios, but that it wouldn't last too much longer. Indeed, NEO slid lower, even beyond the point I was even hoping it would bounce. However, the "bear trap"/ terminal shakeout idea is still in play.
During the end of an accumulation phase, an asset will often experience a test of lower support levels. For NEO, the price decrease happened on low volume after a massive volume spike that took us all the way up near $14, after bottoming in December below $6. Since then, we've corrected down to the $9 area (a healthy retrace, in my opinion), and have begun forming what could be a double bottom on the Bitcoin ratio.
AS LONG AS Bitcoin doesn't drop too much here, I think we can expect NEO to bounce. News for NEO seems to be pretty good, as they just released their Roadmap, which is both ambitious and promising. Activity in their community seems fairly strong. There's no reason to assume the project is "dead." Whether or not it achieves anywhere close to its ATH in Bitcoin value and USD value in the future remains to be seen...but I'm still holding it.
Additionally, if we look at volume, we had a spike just yesterday when we bounced a bit. This is bullish for NEO, since I'd be more worried with an increase in sell volume. That's not the case here. On the contrary, NEO has experienced nothing but large buying volume recently. This tells me we are in a strong demand zone. If Bitcoin does break down, however, NEO could head down to either test the $5 support or even make a new low around $3.70. For now though, I will assume that these levels will continue to hold. I could be wrong. I guess we'll see.
Since so much trading already occurred between 2000 and 2400, I wouldn't be surprised to see a much faster rise. The same could be said for XLM, which may also be experiencing a similar shakeout.
In summary, these are my criteria when looking for a possible terminal shakeout/bear trap (all of which occurred before the ONT rise as well):
1) Fakeout pump on big volume
2) Low volume dump to below psychological support
3) Accumulation on periodic high buying volume
Result: Massive green candle, or BGD and then markup from previous high.
So far, NEO checks all three boxes. Let's see what happens. Here are some possible targets if it bounces from here:
1970
2150
2400
2700
3300
4600
This is not financial advice. Just something I've been looking at. This is meant for educational purposes only.
During the end of an accumulation phase, an asset will often experience a test of lower support levels. For NEO, the price decrease happened on low volume after a massive volume spike that took us all the way up near $14, after bottoming in December below $6. Since then, we've corrected down to the $9 area (a healthy retrace, in my opinion), and have begun forming what could be a double bottom on the Bitcoin ratio.
AS LONG AS Bitcoin doesn't drop too much here, I think we can expect NEO to bounce. News for NEO seems to be pretty good, as they just released their Roadmap, which is both ambitious and promising. Activity in their community seems fairly strong. There's no reason to assume the project is "dead." Whether or not it achieves anywhere close to its ATH in Bitcoin value and USD value in the future remains to be seen...but I'm still holding it.
Additionally, if we look at volume, we had a spike just yesterday when we bounced a bit. This is bullish for NEO, since I'd be more worried with an increase in sell volume. That's not the case here. On the contrary, NEO has experienced nothing but large buying volume recently. This tells me we are in a strong demand zone. If Bitcoin does break down, however, NEO could head down to either test the $5 support or even make a new low around $3.70. For now though, I will assume that these levels will continue to hold. I could be wrong. I guess we'll see.
Since so much trading already occurred between 2000 and 2400, I wouldn't be surprised to see a much faster rise. The same could be said for XLM, which may also be experiencing a similar shakeout.
In summary, these are my criteria when looking for a possible terminal shakeout/bear trap (all of which occurred before the ONT rise as well):
1) Fakeout pump on big volume
2) Low volume dump to below psychological support
3) Accumulation on periodic high buying volume
Result: Massive green candle, or BGD and then markup from previous high.
So far, NEO checks all three boxes. Let's see what happens. Here are some possible targets if it bounces from here:
1970
2150
2400
2700
3300
4600
This is not financial advice. Just something I've been looking at. This is meant for educational purposes only.
Note
Oops, just realized I totally left out a word in my title. Should be “Or Is THIS The Bear Trap We’ve Been Waiting For?” I’m sure you get the idea. Moving up a bit now anyway.Note
Unfortunately I was wrong about seeing a bounce in NEO. We broke our massive long term support and have headed to new lows with no sign of recovery yet. There is actually no historical support below here until the 600 area, so one should probably wait for some confirmed buying action before trading. Things are looking very bad for NEO.Note
We’ll just have to see where buyers finally step in.Note
Decent bounce from the 1550 low, but still looks weak. If the ETH pump can sustain and spread to other alts, perhaps people will see NEO as undervalued again.Note
Looks like NEO is dead in the water. The next support actually really isn't until the 400-600 area. Ouch! Note
I'd love bulls to prove me wrong. That's the theme for today.Note
NEO is still below all of its uptrends, but demand is continuing to be found in the $8-9 range. Perhaps we can throw the extreme bearish view out of the window for now. Obviously, if one sold on the breakdown of 2150, they’re probably looking for a Re-entry here or once a bigger bounce is confirmed.Note
So we've gotten our V-shaped bounce. Since NEO has reclaimed its uptrend, now might not be a bad time to look for a potential entry.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.