NEO / USD Technical Analysis: Following Bearish Steps

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• NEO is bearish in the short and medium-term, with sellers firmly in control
• NEO / USD trades on the neckline of a bearish pattern
• Medium-term picture shows further downside ahead for this cryptocurrency

NEO / USD Short-term price analysis

In the short-term, NEO is bearish and risks an immediate drop towards its all-time price low. The NEO / USD pair is trading perilously close to the neckline of a bearish head and shoulders pattern which shows a $3.00 downside projection.

Overall, there are few reasons to be bullish on the NEO / USD pair in the short-term, especially given the current bearish sentiment towards most of the leading cryptocurrencies at present.

If a strong countermove higher were to occur, a move towards the $8.50 to $9.00 level would be possible, as it would create a symmetrical right-hand shoulder to the previously mentioned bearish pattern.

Pattern Watch

Aside from the obvious bearish pattern seen across the lower time frames, an even larger bearish head and shoulders pattern would start to take shape if the pair did decline towards its all-time trading low, which was established last year.

Key Moving Averages

The NEO / USD pair trades below all major moving averages. Price is consistently trading below its 50-period moving average on the four-hour time frame, which is in line with overall short-term weakness.

NEO / USD Medium-term price analysis

NEO is bearish in the medium-term, with price trading close to the pair’s all-time low. Corrective rallies since mid-December have generally been weak and impulsive, with buyers failing to sustain bullish pressure on the daily or weekly timeframes.

If price continues to decline towards NEO’S all-time low, we can hypothesize that a bearish descending triangle pattern could start to take shape, as seen on the daily chart.

Descending triangle patterns tend to break to the downside and usually perform extremely well in prevailing downtrends.

Pattern Watch

Aside from the potential descending wedge taking shape, the formation of a bearish head and shoulders is also visible on the daily time frame.

It is also worth noting that before the down move during November 2018, the NEO / USD pair was trading within a bearish head and shoulders pattern. Therefore it is correct to say that bearish head and shoulders patterns have been effective for traders selling the NEO / USD pair over a medium-term time frame.

MACD Indicator

The MACD indicator on the daily time frame appears to be preparing for a large directional move, after a period of price consolidation.

It will certainly be interesting to see if the histogram remains consistent with price-action, and if any divergence does occur, particularly on any spikes higher that go against the current trend.

Relative Strength Index

The RSI indicator is starting to turn lower on the daily time frame and has yet to reach oversold conditions at any point since last December, which could be a foreboding sign for the NEO / USD pair.

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