NEO’s price has been enjoying a strong trend to the upside so far this year, but has recently been hit again by a notorious barrier of resistance. NEO/USD from the start of 2019 recovered as much as 112%, rising from the lows of $7 up to the recent high last week at $15. The price was able to jump to its highest level since 14th November 2018.
The noted area of supply is seen running from the $13-$15 price range. NEO faltered here in April and a few times in May. It previously acted as strong demand zone from August-November 2018, preventing the market from free-falling. The bears did after much testing force a breakout to the downside of this zone, which opened a wave of selling pressure.
Big Supporting Trend Line
There is a long-running ascending trend line of support observed for NEO/USD, which has been in play since late 2018. On two occasions in 2019, the price has been required to use this support – in February and May. A breach could be catastrophic, as the NEO price could very quickly see its 2019 recovery gains given back.
New Consensus Algorithm
The developers at NEO have been working behind the scenes for implementation of a new consensus algorithm. Its team recently reported that the integration has now be completed, seeing Byzantine Fault Tolerance mechanism (dBFT 2.0) now on its mainnet.
In terms of the new algorithm, it boasts the ability to provide immediate transaction finality. The dBFT 2.0 also sees a new procedure leveraged for reintegrating failed nodes back into the network. Adding a “commit phase” of consensus alleviates any forking related issues by including a step that will force node assignment to new blocks.
Erik Zhang, the NEO founder and creator of the first dBFT protocol, commented on the completed integration:
With this improvement, dBFT will have more strict finality. Users only need to wait for one confirmation (15 seconds) to ensure the irreversibility of the transactions and prevent double-spending. This is very suitable for financial applications.
Given the decent support for NEO/USD, a buy position is attractive; however, it would be ideal to see another retest of the trend line for entry. Should the price pullback down to the earlier noted support, it would provide decent risk-to-reward. Eyes would be for entry as close to $10 where the ascending trend line is tracking.
The second opportunity for entry would be once the price has broken and closed above the trend line north, which forms a wedge structure. A confirmation would be the daily candlestick closing and then using the prior resistance as support. In terms of upside target, $20 is eyed. It last traded here in September 2018. This would be followed by $25; NEO last traded here also in September.
In terms of stops, upon entry around $10 is eyed. The next stop will be placed just below the noted trend line of support at $8. If entry is made above the detailed resistance upon daily closure, around $14.50, then stops may be placed at $13.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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