Neocoin (NEO) Price Prediction for 2021: Will the Bounce off the 20 SMA Continue?
NEO/USD – Forecast Summary
|NEO Forecast: H2 2021|
Price: $80 – $100
Price drivers: Cryptocurrency Market, Ethereum prices, Cryptocurrency crackdown
|NEO Forecast: 1 Year|
Price: $130 – $200
Price drivers: Increased Adoption and Utility, Cryptocurrency Market, War on cryptos
|NEO Forecast: 3 Years|
Price: $600 – $ 800
Price drivers: Global crypto politics, New Developments from NEO, Crypto Market Sentiment
Like Ethereum, Neo is a cryptocurrency and blockchain platform capable of building a scalable network of decentralized applications. Neo coin, authored by Da Hongfei and Erik Zhang, declares itself as a distributed network for a smart economy. The interesting thing that makes NEO unique is the extreme 12-month price performance, just like Stellar and Bitcoin. In May 2020, Neo was trading at $10, and in May 2021, Neo reached its second peak at $147.75, which was still short of the January 2018 high of $207 and now, in the middle of August, it is trading around $55 After the crash.
Neo coin was making lower lows after the crash until late July when it bottomed at $25. Although the sentiment has improved in the crypto market since then and Neo has gained more than double its value, climbing above $50. Moving averages came to help on larger timeframes and NEO/IUSD bounced off of them, with the sentiment remaining bullish.
The emergence of new cryptocurrencies and blockchain apps gained momentum in late 2020 and the first several months of 2021, mainly because of the race towards transferring the centralized economy and governance towards decentralization. This trend was first started by Ethereum and has been followed by many cryptocurrencies and blockchain projects by hosting various dApps and smart contracts. Neo coin (NEO), initially known as “AntShares,” has gained a lot of popularity in hosting smart contracts and dApps. It is said to be a direct contender to Ethereum and is also known as Chinese Ethereum or Ethereum Killer, although it hasn’t been able to hold the gains during this crypto crackdown from the Chinese government. Another feature that makes NEO more attractive is that it pays out dividends to its owners, unlike Ethereum. Neo also registers physical assets via a digital identity, which means the new coin has quite a few features that made it popular in a short span of time.
Recent Changes in the NEO/USD Price
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Neocoin (NEO) Price Prediction for the Next 5 Years
One thing that has given Neo an advantage in the race among emerging digital currencies is its similar price rise trajectory to Bitcoin. The king of cryptocurrency BTC went from $7150 to $64,000 in the time span of one year. If we look at Neo’s price fluctuation in the same time period, the new coin has gained almost a similar percentage to that of Bitcoin. During the 12-month period until May, Neo gained +755%, and Bitcoin has gained about +795% in the same period.
On the other hand, if we compare the prices of Neo coin with its rival Ethereum, the second-largest cryptocurrency is ahead for the moment. During April 2020, the Ethereum coin was trading at $174; however, in mid-April 2021, the coin reached $2,300 and gained about a +1,220% price increase and the increase continued further until May. Ethereum has seen a sizable price increase advantage during the last 12 months, and it is the only currency that has gained so much during this time span. Neo also offers dividends to Neo holders, which it pays out on its other cryptocurrency called GAS, while Ethereum doesn’t offer dividends.
Ethereum blockchain uses only one coding language, Solidity, making it less user-friendly as programmers have to learn it from scratch. The unique feature of being a multi-lingual blockchain gives Neo an advantage over Ethereum and can lift its prices upward in the near and long-term future. Neo coin is ranked 42 by market cap at $1.981B according to Coinmarketcap (mid-July 2021); however, still, it can handle more transactions per second (TPS) than the second-largest cryptocurrency of the world, Ethereum, which has a massive market cap of $392.86 B at one point in May. Ethereum’s blockchain can handle only 15 TPS while Neo blockchain can handle 10,000 TPS. Another interesting thing where Neo holds an advantage is that many Neo transactions are free, unlike Ethereum, whose gas charges are enormously high. It has also been known as a blockchain for riches.
Neo and Ethereum are both markedly different on various aspects, from scalability and tech to their philosophy. Still, both coins support smart contracts and decentralized apps, and both these projects have lifted the cryptocurrency market higher due to their increased popularity. As there is a huge scope for smart contracts and dApps in the recent and coming era, the demand for blockchain platforms supporting these projects will also rise, which will help drive Neo and other similar digital asset prices higher in the future.
Factors Affecting NEO prices:
Chinese Government – NEO is also known as Chinese Ethereum, and it is also China’s first blockchain network. During the 2017 boom of cryptocurrencies, China and Korea played an important role in driving their prices higher. Before that, about 75% of Bitcoin trading originated in China. The Chinese government was not happy with that and wanted to maintain tight control that brought up strict regulations in the cryptocurrency market in China. China continued with such action in 2021, sending the crypto market and Neo diving lower until August, but the sentiment has improved and this market has rebounded after that.
Neo is also referred to as the official cryptocurrency of China because it has gained the government’s support as it complies with the regulations. Given the considerable population of China, the investment share in the cryptocurrency market by Chinese people is considerably large. The Chinese government has already been cautious, and any sanction or regulation imposed on another cryptocurrency could bring NEO under the spotlight. Any positive decision by the Chinese government and people for cryptocurrency, will drive up NEO’s adoption and will support its prices.
Competitors– Neo, also known as Ethereum Killer or an Ethereum upgrade, holds a threat as it faces strong competition from Ethereum. Both projects are of similar nature and provide a platform for smart contracts and dApps; they have established strong competition. Ethereum is also known as the queen of cryptocurrencies and has maintained its position as a strong coin in the market. In contrast, NEO is comparatively newer and has a long way to go. Therefore, due to the high level of competition, the rising prices of Ethereum can cause a downward shift in the prices of NEO and vice versa.
Hard-capped Supply – In any market, the prices of products are determined when supply and demand meet. Scarcity drives the prices of a commodity on the upward side. Unlike other goods and services, cryptocurrencies are unique as they come with a hard-capped supply. The restricted supply of coins bring out the element of scarcity and push the prices of coins upward. The supply of NEO is also limited at 100 million coins, out of which 70.5 million NEO coins are already under circulation. It means only around 25 million NEO tokens are left, and hence, NEO is scarce. Over time, this scarcity will only increase as supply cannot be altered, and the limited supply feature will be a factor that will drive NEO coin prices higher.
Non-Financial Applications – The NEO blockchain platform can create a countless number of applications such as identity-theft prevention, supply chain monitoring, and many others. These applications use the NEO token by default as their in-app currency. Any further development of this aspect of the platform could contribute a lot to the demand for NEO tokens in the future. Neo is also used for digitization of physical assets and verifiable digital identities, bringing these markets into the crypto world.
Bitcoin – For better or worse, Bitcoin is still considered the king of cryptocurrencies due to its largest share in the cryptocurrency market. And it can still often influence the majority of the market. Bitcoin and NEO coin have a correlation of 0.77 which means Bitcoin holds a huge influence over NEO coin and can drive its prices. If Bitcoin moves on a bull run, other cryptocurrencies, including NEO, will follow suit. Similarly, if Bitcoin turns bearish, the NEO coin and many other cryptocurrencies will go down with it.
Technical Analysis – NEO/USD Forming Bullish Reversing Patterns in All Timeframes
On the technical front, Neo has been trading on a bullish trend since late July and now it has moved above all moving averages and moving above $60 earlier today. The 200 SMA (purple) was acting as resistance on the daily chart, after it had acted as support earlier during the decline in May and June. The 20 SMA (gray) was also pushing the price down, but now all moving averages have been broken on the daily chart.
NEO/USD Daily Time-frame – Moving averages have been broken
The weekly chart also supports the idea of a bullish reversal. After coming down for two months, the 100 SMA (green) has been holding twice as support and didn’t not letting go. One of the July candlesticks formed a pin, which also is a bullish reversing signal, besides stochastic being severely oversold The 200 SMA (purple) which has just appeared was also adding more strength to the 100 SMA around $25, as support. Now the price has reversed higher as the chart shows, but buyers need to take out the 20 SMA, which shouldn’t bee too much of a problem considering the price action of recent weeks.
NEO/USD Weekly Time-frame – Facing the 20 SMA
The monthly chart is also starting to look bullish in the last two months, after the surge and the crash earlier this year, which looked similar to the reversal in 2018. The previous high was broken this time, but New crashed as the entire crypto market. The 20 SMA (gray) here acted as support again, after doing so late last year. The stochastic indicator was also oversold here, which pointed to a bullish reversal as well, so the reversal seems underway, after the hammer candlestick in July and the bullish candlestick in August.