As of today, NEO is the ninth largest cryptocurrency, closely following BitConnect and closely followed by Monero. With a market capitalization of less than $1.4 billion, NEO is hardly as important as Bitcoin, which exceeded the $100 billion mark last week, but this does not mean it cannot offer some interesting opportunities.
The price of the cryptocurrency fell to as low as $13.19 in the middle of last month and rose to as high as $38.94 a little over two weeks later, on October 2nd. But the bulls could not keep their momentum, which led to a decline to $25.83 on Saturday. In order to find out if all these random figures mean something, we need to put them into the context of the Elliott Wave Principle and see if a pattern would emerge. The 4-hour chart of NEOUSD given below allows us to do so.
As visible, the rally to $38.94 looks like a textbook five-wave impulse, labeled 1-2-3-4-5. According to the theory, a three-wave correction should follow and that is where the pullback to $25.83 perfectly fits. The Wave principle also states that once the correction is over and the 5-3 wave cycle is complete, the trend is supposed to resume in the direction of the impulsive pattern.
If this count is correct, the corrective phase of the cycle, labeled as simple A-B-C zig-zag in wave (2/B) is nearly over. Wave C appears to be developing as an ending diagonal, whose fifth wave could drag NEO to a new swing low first, but as long as the price stays above the starting point of the five-wave pattern at $13.19, targets above $39 remain plausible. There is still hope for NEO bulls…