NEO is gaining further bearish traction since bouncing off the area of interest around 50.00. Applying the Fibonacci extension tool on this pullback shows how low price could go from here.
NEO is already approaching the 38.2% extension at 23.00 and stronger selling pressure could take it down to the 50% extension at 15.05. The 61.8% extension is at 6.93 and the rest of the levels are already in negative territory.
The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, the selloff is more likely to carry on than to reverse. Also, the gap between the moving averages is widening to reflect stronger selling momentum.
RSI is also heading lower to indicate that sellers have the upper hand, but the oscillator is dipping into oversold territory to signal exhaustion. Turning back up could bring buyers in and lead to a bounce for NEO. Stochastic looks ready to bottom out from the oversold region, possibly indicating a pickup in buying pressure as well.
Just like most of its cryptocurrency peers, NEO has been on a rough ride lately, being bogged down by news of the HitBTC outage and South Korea’s plans to remove tax benefits on crypto exchanges.
It didn’t help that well-known economist Paul Krugman recently lambasted cryptocurrencies for their transaction fees and absence of tethering. For him, there is no problem that is being solved by these assets and he sees no need for it to replace the current monetary system. Furthermore he predicted a collapse if people decide that these assets are worthless.
On a more upbeat note for NEO, though, the company has partnered with formal verification company CertiK. This company offers “layer-based decomposition approach, pluggable proof engine, machine-checkable proof objects, certified decentralized application (dApp) libraries, and smart labelling.”