The NEO has started to retrace lower, after the popular cryptocurrency rallied to its highest trading level since mid-November 2019 last week.
NEO technical analysis shows signs this bearish pattern highlights further short-term weakness for the cryptocurrency.
NEO medium-term price trend
NEO analysis shows that the cryptocurrency is bullish over the medium-term while trading above the $9.80 (£7.46, €8.83) resistance level.
The NEO/USD pair has enjoyed a gain of around 50 per cent so far this year, although it’s still trading well below its 2019 price high of $24.00.
NEO has entered into a period of consolidation after finding strong technical resistance from the $12.50 level. The $13.60 level is the next big upside level bulls need to surpass in order to advance towards the $15.00 level.
A bearish head-and-shoulders pattern is currently looming over the cryptocurrency on the daily timeframe, which has been in place since July 2019.
Over the medium-term, buyers would need to rally the NEO/USD pair towards the $24.00 level to negate the bearish pattern, which would then help to form a bullish reversal pattern.
NEO short-term price trend
NEO technical analysis over the short term shows that the cryptocurrency is bullish while price trades above the $9.50 level.
A head-and-shoulders pattern has recently formed on the lower time frames, with the neckline of the pattern located around the $10.70 level.
The size of the bullish pattern suggests a pullback towards the $9.50 to $9.00 level may occur before NEO starts to head higher again.
If bulls invalidate the pattern, a rally towards the $14.00 level – and possibly even higher – should be expected.
Continued weakness under the $11.00 level should be taken as a sign that the recent short-term upside momentum has faded and bulls may regroup at lower levels.
NEO technical summary
NEO technical analysis suggests that short-term weakness may persist. A bearish head-and-shoulders pattern is also currently visible across the lower and upper timeframes.