NEO’s dismal performance in August has likely strengthened the already strong bear grip on its market.
Throughout the month, the world’s 14th largest cryptocurrency has moved in tandem with the broader market, which took a beating in August due to SEC’s rejection of multiple bitcoin exchange-traded funds (ETFs).
Notably, the total market capitalization of all cryptocurrencies was printing more than $100 billion loss just two weeks into the month as the metric sank below $200 billion for the first time in over eight months. At the same time, NEO was reporting monthly lows below $14.50.
However, the broader market made a considerable rebound in the final two weeks of August, regaining nearly $40 billion of the lost value in total market capitalization.
Still, the rally towards August’s end was not enough for many cryptocurrencies to salvage the considerable losses endured in the weeks prior, including the likes of bitcoin (BTC) and ether (ETH), the markets largest assets, reporting double-digit monthly losses.
NEO also recovered 35 percent from the lows seen on Aug. 14 but is still a standout performer in the losers column.
Monthly performance: -39.62 percent
All-time high: $162.11
Closing price on August 31: $31.73
Current market price: $19.16
Rank as per market capitalization: 15
NEO came stumbling into August thanks to a less than impressive performance in July when its price declined more than 40 percent month to month. The resulting short-term oversold conditions, however, did little to put a bid under the cryptocurrency.
Prices continued their descent from a starting price of $28.87 on Aug. 1 to its monthly low of $14.38 set on Aug. 14, at the time representing a 50.16 percent two-week depreciation.
The cryptocurrency made a bit of a comeback during the last two weeks of August, climbing 33 percent from its monthly low to a final price of just over $19 on Aug. 31. All in all, NEO printed a 39.62 percent loss during the month of August.
The above chart paints the picture of a cryptocurrency stuck in limbo.
A rebound from the key support of $14, though encouraging, is not enough to for the bulls to make a strong comeback. Only a break above $30 (former support-turned-resistance) would indicate a bottom has been made.
However, it could be a tough task, as the 5-month and 10-month moving averages (MAs) reside above current prices, indicating the path of least resistance is still to the downside. Further, with six of the last seven months flashing red, it is clear that bears are in control.
Still, the monthly candle does offer some hope for bulls due to its lengthy bottom wick, which indicates there was considerable buying after price touched the $14 support.
A monthly close above current resistance at $34.00 would return the longer term trend to bullish favor and set the scope for a rally to $50 – the location of prior support and 5-month moving average. On the other hand, a close below current support of $14 would confirm the bearish strength and likely send prices to the prior support of $7.70.
Disclosure: The author holds BTC, AST, REQ, OMG, FUEL, 1st and AMP at the time of writing.
NEO image via Shutterstock