Anyone invested in NEO (NEO) for the last 7 months is pretty much rekt. The price has dropped by a huge margin from close to $200 to its current price of $26. NEO’s drop has been harder than that of most other major cryptos such as bitcoin (BTC) and Ethereum (ETH).
In the charts, NEO (NEO) has clearly broken market structure having dropped below a yearly support level at $27. This means that NEO (NEO) is now firmly in bear territory, since it is below September 2017 price levels, when the market wide pump gained momentum. Bitcoin (BTC) and Ethereum (ETH) are still way above these levels. Anyone who bought Ethereum (ETH) or Bitcoin (BTC) in September 2017 is still in the money, but anyone who bought and held NEO (NEO) from that point to date is now in negative territory.
So does this mean that NEO (NEO) is now a perfect buy opportunity? From a technical analysis perspective, NEO (NEO) may not be the best buy at this point, unless you intend to hold it for several years. That’s because at its current price, most people holding NEO have exited the market. At the same time buyers are slow to come in because they fear that it could go lower. Markets have always shown that a huge drop in price doesn’t always mean that the price can’t go lower. In this case, that risk is increased by the fact that Bitcoin is still bearish, in spite of its recent price rallies. As such, the fact that bitcoin is yet to hit the bottom means that NEO can actually go lower, and its holding back buyers.
As such, NEO is likely to be characterized by low volumes for some time to come. This means that it could enter into a consolidation phase that could last for months or years, before it turns bullish again. Bitcoin had a similar chart a few years back and entered into a consolidation phase that lasted for several years.
NEO’s short-term chances of a bull run are also hampered by macro factors. Just recently, the Chinese government published a ranking for what it believed are top cryptos. Surprisingly, they ranked Ethereum (ETH) ahead of NEO (NEO) yet it is supposed to be the Chinese version of Ethereum. That’s not good for NEO’s prospects of major partnerships with state-backed corporations in China. Besides, there are many other projects coming up that not only rival NEO (NEO) but Ethereum as well. This means that the space is now more competitive, and could hamper NEO’s chances of exponential growth in price.
However, that doesn’t mean that the project is dead. Over time, as more developers create Dapps on it, its value will grow. Therefore, for someone who is already rekt by NEO, it makes sense to hold since the dollar value of their investment is already lost, and selling now would be a tremendous loss. Trying to swing trade it would not work that well either, since it’s headed into a long-term consolidation phase. The best approach would be to buy-in, with the next 3 to 5 years in mind. At this point, NEO is now beyond speculation, and is best for long-term investors.