NEO (NEO), on of the older platform cryptos and often in the past referred to as “the Chinese Ethereum,” has stood out this weekend as one of the few altcoins which have followed Bitcoin’s breakout up. Some (including us) have speculated that NEO’s performance is associated with the recent speech of China’s president, Xi Jinping, who gave a speech last Friday avowing China’s commitment to becoming a leader in blockchain technology.
But, this not being a fundamental analysis: Let’s head to the daily NEO/BTC chart. We see that NEO broke away and up from near the bottom of a local market structure on October 25, and then completely out of that structure by October 27 -- pretty much in step with Bitcoin.
This is unusual, as almost all other altcoins -- even ones that have done extremely well lately versus BTC, like ChainLink (LINK) -- sold off against the leading crypto. Hence the China narrative for “Chinese Ethereum.”
Looking on a typical daily chart, we see that the NEO rally ran aground right within previous support. It has blown far past the 55 EMA, which price had been responding to, and come with a massive (almost all buy) volume spike: about 5,000 bitcoin worth on Binance alone, between October 26-27.
Naturally, NEO is way overbought on the daily RSI and currently going through a retracement. On NEO’s weekly histogram, we see that a parabolic arch up was painted after the candle close, and it will be very interesting to see if this week’s performance can maintain that profile. The 21-week EMA -- near the 0.382 Fibonacci level -- is currently holding NEO/BTC up, but it would be no surprise to see a deeper retracement.
The golden pocket area on the Fibonacci retracement scale is just above the breakout area, and would generally be a juicy entry position if it is offered. If NEO does not even give back the 21 EMA, it could been seen as seriously bullish -- but we won’t know that outcome for six more days.
This outperformance of Bitcoin has of course translated to an even more shocking push on the NEO/USD side of things, resulting in a full 2x in a span of about four days. This surprise performance out of the aged platform crypto should have us keeping one and a half eyes on it, especially if Bitcoin’s trend really has been saved from a lengthy downtrend.
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