The Neo market chose to retest the $50 zone as I suggested in my previous report, a healthy correction for the Neo market. We can see that there is some open interest around this zone, it will be interesting to see how the market plays out today.
There has been a decent increase in buying volume when the RSI hits the lower regions, this would suggest to me some interest from the bulls, possible accumulation. With the volatility of the crypto markets I would remind you that any attempts to pick bottoms should be considered high risk.
The market is still in a strong bearish trend on the short term, and we are testing critical support of the longer term plays. Anything can happen in the markets, and in this kind of a situation I usually prepare for all scenarios.
Should prices fall below the current support of $50 I would expect more selling in the market, we can also expect that the open interest would build quite rapidly should there be another sell off. Were that to happen, keep an eye out for a shift in momentum, which would announce the arrival of the bulls, if it falls like a rock, be patient and wait for the buyers to show up.
Lets have a look at the Neo markets versus Bitcoin.
As we can see in this chart there is a clear divergence between the two, which might suggest a break to the top or bottom soon. Notice how the RSI is confirming this divergence in the markets. RSI is also above 50 on the 4 hour candle chart which would suggest bullish momentum.
Support for me against Bitcoin is between 0.0068 btc – 0.0072 btc, I give it quite a wide range as I would hate to get wiped out because of volatility. Some higher risk traders might find this setup quite appealing and we could see some more interest building in the market.
Bear in mind that the markets are still recovering. It would be a much safer option to wait for markets to consolidate above the current resistance, before considering going long on the market. Short term resistance is quite solid above 0.0074.