NEO Begins Selection Process To Decentralize Another One Of Their Nodes — Can The News Keep NEO Above $6?

  • The NEO Foundation has announced their plans to begin decentralizing the rest of their foundation-run nodes.
  • The market is trading at support near the $6.29 handle, with crucial support below at $6.
  • Support moving forward: $6.29, $6.00, $5.00, $4.51, $4.00, $3.73, $3.27, $3.00, $2.34.
  • Resistance moving forward: $7.95, $8.41, $10.21, $11.67, $13.12, $14.29, $15.50.

Latest NEO News

In a recent blog post, the NEO Foundation has announced that they have begun the process that will eventually lead to full decentralization on the NEO blockchain. This will begin with NEO decentralizing another one of their nodes that are currently run by the NEO Foundation.

Currently, there is a total of 7 nodes that maintain the integrity of the NEO blockchain by adding blocks filled with transactions and information. Along with keeping consensus on the blockchain, the nodes also help to enforce upgrades and set the transaction fee prices.

Of the 7 consensus nodes available today, 5 are run by the NEO Foundation. The other 2 are run by 2 separate entities; KPN, a Dutch telecom company and the City of Zion, a NEO-focused development company.

However, in their announcement, the team has made it clear that they are opening the selection process to applicants who want to run and operate one of these nodes. The winner of the selection process will be based upon their qualifications to run the node and their potential contributions toward the NEO ecosystem.

If you think you have what it takes to run a NEO node, you can find out more here.

This off-chain selection process and governance is intended to speed up the decentralization process for the project. The team intends to allocate 4 of their 5 nodes in 2019 to applicants who have passed the screening process and have completed a 6-month trial period on the NEO testnet.

The NEO Foundation has also stated that they intend to increase the number of consensus nodes available, at their own discretion, after the first 7 have been completely decentralized. This will be done by making additional nodes in batches of 3 to avoid fault tolerance within the blockchain.

Let us take a look at how the NEO/USD market has been holding up and continue to highlight some potential areas of support and resistance to look out for.

NEO Price Analysis

NEO has seen an increase in price totaling 1.53% over the previous 24-hour trading period. The cryptocurrency is now exchanging hands at a price around $6.29, at the time of writing, after suffering a sharp 19.31% price drop over the past 7 trading days and a further precipitous 60% price decline over the past 30 trading days.

The 27-month old project is now ranked in 18th position according to its market cap and holds a total value of $408 million.

NEO Daily Chart

Analyzing NEO/USD price action from the short-term perspective above, we can see that November 2018 was a difficult time for NEO/USD (and most other cryptocurrency markets) as price action dropped a significant 62% from a high above $17 to a low beneath $7.

NEO/USD has slipped even further during December 2018 as the market now trades at support provided by a long-term downside 1.272 FIbonacci Extension level (drawn in purple) priced at $6.29.

Trend: Bearish Below $6

The market has found a small level of stabilization at the aforementioned support level.

However, if the sellers continue to pressure price action lower and the market breaks below $6, we could see price action sinking some more.

Where is the Support for NEO/USD Below $6?

If price action does break below the $6 handle, we can expect further support below to be located at the short-term downside 1.272 and 1.414 Fibonacci Extension levels (drawn in orange), priced at $4.51 and $4.00 respectively.

If the sellers continue to pressure the market further below the $4.00 handle, more immediate support beneath can be located at the medium-term downside 1.272 FIbonacci Extension level (drawn in blue) priced at $3.73, followed by the short-term downside 1.618 FIbonacci Extension level (Drawn in orange) priced at $3.27.

In the case that the bearish market causes NEO/USD to head below the psychological support at the $3 round number handle, we can expect even further support below to be located at the long-term downside 1.414 Fibonacci Extension level (drawn in purple) priced at $2.34.

What If NEO/USD Manages to Remain Above $6?

If the buyers can defend the $6 handle and cause price action to reverse, we can expect the bulls to meet immediate significant resistance above at the previous downside 1.618 Fibonacci Extension level (drawn in peach) priced at $7.95, followed by the short-term bearish .236 Fibonacci Retracement level (drawn in red) priced at $8.41.

If the bullish momentum continues to drive price action further higher, more resistance above can be expected at the bearish .382 and .5 Fibonacci Retracement levels (drawn in red), priced at $10.21 and $11.67 respectively.

What are the Technical Indicators Showing?

The RSI is trading below the 50 handle which indicates that the bears are still in control of the market momentum.

However, the RSI has pretty much traded sideways which suggests that the bearish momentum is not increasing. If the RSI can head back toward the 50 handle and break above, we can expect NEO/USD to begin to make a recovery.

Conclusion

The fact that the NEO Foundation is ready to begin the decentralization process of its nodes should bring promise for NEO holders as decentralization is one of the main characteristics of a strong cryptocurrency.

However, market conditions are still very uncertain within the entire industry so we do not expect this to become market-moving news. The $6 handle is now a crucial level of support moving forward.

If the bears to manage to break below, we could see NEO/USD heading much further lower.

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