- NEO has surged 100% over the past few weeks.
- The bullish sentiment behind this cryptocurrency rally seems to be related to China’s decision to embrace blockchain technology.
- One trader says NEO may have a bright forecast.
NEO, one of China’s most prominent blockchain projects, has been on a roll since Chinese President Xi Jinping announced that his country would “take the leading position in the emerging field of blockchain.”
Since then, this cryptocurrency skyrocketed nearly 100%, and now it is signaling a further upward advance.
The Catalyst: China Embracing Blockchain Technology
On Oct. 25, the Chinese government vowed to put the nation at the forefront of blockchain technology. Several agencies under the control of President Xi’s administration immediately began putting that plan into practice.
The National Development and Reform Commission (NDRC), for instance, published an updated version of guidelines that define “virtual currency mining” and take it off a list of banned commercial activities.
Additionally, the People’s Bank of China is on the verge of launching its own cryptocurrency – or at least a blockchain-based digital token. According to the head of the digital currency research institute at the People’s Bank of China, Mu Changchun, users of the Digital Currency Electronic Payment (DCEP) will be guaranteed “controllable anonymity,” as long as they are not engaging in illegal activities.
Finally, Xinhua News Agency, the official state-run press agency in China, recently published a report featuring an unbiased view on bitcoin to hundreds of millions of Chinese citizens. Calling bitcoin the “first successful application of blockchain technology,” the article lays out the intricacies of bitcoin, and attempts to filter between hype and the “future currency development.”
NEO Benefits from China’s Blockchain Pivot
Speaking to CCN.com, eToro Senior Market Analyst Mati Greenspan said that “China’s huge push” towards blockchain and tokenization is already being felt on the ground.
According to Greenspan,
NEO is a cryptocurrency network whose main value proposition is that it is Chinese regulatory compliant. This gives it a huge advantage for any new Chinese blockchain startups.
The so-called “Chinese Ethereum” has hoarded the attention of investors for over the last few weeks, adding nearly 100% to its total value. As more information about China’s involvement in blockchain becomes available, NEO could sustain its bullish momentum and continue rising.
Trader: NEO Technical Analysis Gives Bullish Outlook
CryptoVince, a well-known crypto trader, told CCN.com that the NEO upswing is directly related to China’s blockchain endorsement. The analyst believes that sellers were wiped out since this cryptocurrency continued rising without any signs of a retracement.
He said,
The 100% upward move NEO experienced is pretty much based on China’s decision to embrace blockchain technology. I wasn’t so confident that this crypto was going to stay this high for so long, but it has managed to continue its uptrend. Usually, quick upswings end in quick retracements. But, NEO has obliterated the bears and bulls are now in full control.
As “the bulls” take control over NEO, a bull flag appears to be developing on its 1-week chart. The bullish impulse that took NEO to $13.50 formed the flagpole. Meanwhile, the current consolidation phase it entered on Oct. 29 is creating the flag.
This technical pattern estimates a breakout in the same direction of the previous trend. The height of the flagpole presents a 49% target to the upside. NEO could surge to $17.50 upon validation of the continuation pattern.
CryptoVince added that if NEO can close and hold above $15, then the odds for a long-term trend change from bearish to bullish increase significantly. However, if this cryptocurrency moves below $10, traders should brace for further losses.
Disclaimer: The technical analysis above should is not a trading advice from CCN.com. The writer owns bitcoin, ethereum, and other cryptocurrencies. He holds investment positions in different cryptos but does not engage in short-term or day-trading.
Last modified: June 12, 2020 6:51 PM UTC
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