Renowned Analyst Estimates Big Move for NEO
The "Chinese Ethereum" may be set for a big run.
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NEO has been on a rampage lately, surging 115% since mid-December 2019. Despite the substantial bullish impulse, a renowned technical analyst believes that it could advance even further. Is it realistic?
NEO Looks Ready to Fly
Scott Melker, a well-known trader in the crypto community, recently pointed out that the NEO/BTC trading pair broke out of an inverse head-and-shoulders pattern. This is a trend reversal formation that was developing on NEO’s 1-day chart for the past ten months, according to the analyst.
Now that NEO moved above the neckline or breakout point, Melker expects a 50% move up that could take it to a high of 2,100 satoshis, or roughly $0.20.
“This is still my favorite long term setup right now, which is saying a lot. Price broke out of the massive inverse head and shoulders and is testing horizontal resistance. Volume is rising daily, price tends to follow. Flipping 1528 to support should set this on fire,” said Melker.
Due to the extended period of time that it took the inverse head-and-shoulders pattern to develop, Melker sees “no reason to turn bearish on a setup this massive.” However, a daily candlestick close below the right shoulder at 1,150 satoshis could invalidate the bullish outlook.
USD Pair Also Looks Bullish
A glimpse at the NEO/USD trading pair also shows potential for a massive upswing. Based on its 1-week chart, this cryptocurrency seems to be forming an ascending triangle. This technical pattern is developing as a direct result of NEO’s price movements. A horizontal line was created along with the swing highs and a rising trendline along with the swing lows.
Although NEO could still pull back to the hypotenuse before it finally breaks out, the $17.60 resistance level represents a key price point to pay attention to. A move above this price barrier could be the catalyst for a 70% upswing that takes this cryptocurrency to $30.
This target is determined by measuring the height of the triangle at its thickest point, and adding that distance to the breakout point.
It is worth noting that there is not a single technical pattern that can be validated without confirmation. Therefore, it is very important to remain patient waiting for multiple signals to confirm any of the bullish patterns mentioned above.
Jesse Livermore, also known as the pioneer of day trading, once said:
“Do not anticipate and move without market confirmation. Being a little late in your trade is your insurance that you are right or wrong.”