Neo has seen a pretty respectable year for 2019 when compared relatively to the rest of the cryptocurrency market. The cryptocurrency has managed to increase by a total of 50% from the yearly opening price of $7.53 to the late-October price of $11.50.
Neo has much to look forward to in 2020 with developmental upgrades that will take Neo miles ahead of its competitors. The cryptocurrency will also be helped by the close relationship it has with the Chinese government. The president of China had recently made comments stating that he would like China to be leaders in the blockchain industry which had helped Neo to surge by a total of 48% hours after his comments.
Furthermore, Neo has strategic partnerships in play that will help to take the cryptocurrency to a mass audience, especially in China, which will certainly help Neo rise in 2020. For these combined reasons, I strongly believe that Neo may shock people in 2020 and surge by a total of 380% to reach my target of $50 at some point by the end of 2020.
In this article, I’ll firstly cover a range of topics that I believe will influence NEO in reaching my $50 target during 2020 and then analyze NEO on the long term daily charts to highlight some areas of resistance on the way toward the target.
Introducing Neo - A Strong Competitor In The dApp Landscape!
Neo has long been touted as the Chinese Ethereum and was actually the first digital coin out of China. Originally labeled AntShares and founded by Da Hongei in 2014, the project rebranded into Neo to reach a global audience.
The project is designed to be a platform that allows developers to come and create smart contracts and decentralized applications on top of decentralized blockchain infrastructure. However, Neo takes the concept much further than competitors as it has visions to create a full “Smart Economy” by incorporating digital assets that can be managed via digital identity within these smart contracts.
Neo uses a Delegated Byzantine Fault Tolerance (dBFT) consensus mechanism which utilizes a group of elected individuals to manage the nodes on the network and maintain the blockchain. These nodes are in charge of creating new blocks and facilitating transactions on the network. This type of consensus mechanism is highly scalable and can allow currently up to 10,000 Transactions Per Second. Neo incorporates a digital identity system which can help to identify node owners and prevent them from acting maliciously, however, they are always incentivized to provide a good service as they can easily be voted out by the community of NEO holders.
Neo is an attractive option for developers to deploy dApps upon as their NeoContract product allows developers to create smart contracts without having to learn any new programming language. Developers can choose to use popular coding languages such as C# Java and Go according to their own preferences. This is ideal as on other blockchains, such as Ethereum, an entirely new coding language is needed to be learned which creates a barrier to entry for developers.
Find out more about NEO in this great write-up.
Neo Has Strong Access To A Crypto Resilient Country
As Neo is a Chinese based project, it is strongly welcomed in a country that is notorious in blocking any outside technology services. This provides a strong market for Neo as a project. The price for Neo is strongly affected by its close partnership with the Chinese authorities. This was apparent during October 2019 when Chinese president Xi Jinping made comments about accelerating blockchain adoption within China, causing a 45% surge for NEO. Xi Jinping had stated that China must lead the world in blockchain technology as he plans to leverage blockchain to revolutionize all of its core industries. These are strong words from the leader of a country who has had a shaky relationship with blockchain and cryptocurrencies over the years.
Nevertheless, this is strong for Neo as they are free to introduce their Smart Economy to the Chinese market without too much push-back from authorities.
Partnerships, Deals, and Community Grants, Neo Has Everything To Spur Growth!
Source: Zel Medium
One of the most promising partnerships for Neo is their recent deal with ZelCore, announced in July 2019, designed to help to bring mass adoption to Neo. The partnership with Zel through the ZwlLabs program will see Zel adding NEO, GAS, and all Nep-5 assets to the ZelCore wallet for custody management. This will allow NEO holders to trade and store NEP-5 assets easily in ZelCore. Daniel Keller, CSO of Zel Technologies said;
“This partnership joins two of the best crypto communities around to create awareness of the NEO economic model as well as the ZelCore asset support structure. Zel aims to bring NEO, Gas, and all NEP-5 assets to the world and we couldn’t be happier!”
Source: neo.org
NEO Ecoboost is a $100 million program structured to support developers in creating smart contracts and decentralized applications on top of the NEO blockchain - It is aimed to provide growth support to NEO projects helping to create a strong ecosystem. It is important for the Neo dApp ecosystem to thrive as this will help to give NEO utility.
Nash Decentralized Exchange, NEX, is Neo’s answer to decentralized exchanges. This is exciting for the Neo ecosystem (and the overall community) as it is a compliant crypto dex platform for payment services and decentralized crypto trading. Built on the Neo blockchain, the platform uses zero-knowledge proof password management which allows users to access a range of private keys without them being susceptible to attack.
Source: Nash.io
The user-friendly decentralized exchange is set to provide a way for users to trade cryptocurrencies without needing to trust a third party to hold their assets.
The interesting this is that their token is already registered as a security and the platform is trying to obtain a license to let other securities be traded on the platform.
Neo 3.0 - An Evolution Of Neo
The most exciting thing surrounding Neo is the upcoming launch of Neo 3.0 - an upgrade that will take Neo into the next stratosphere in terms of efficiency and security.
Neo 3.0 will be an entirely new version of NEO which is aimed to be built for large scale enterprise purposed. The Neo 3.0 upgrade will cause Neo to become a robust blockchain with extremely high throughput, enhanced stability and security, and an optimized smart contract system. This will provide a higher TPS rate with increased stability. The expanded APIs will also provide further enhancement for smart contract functions.
The upgrade to Neo 3.0 will also see a new iteration of the dBFT consensus mechanism which will provide a more stable version of the consensus mechanism after introducing a new recovery mechanism to ensure a quick revival when one of the nodes goes down.
A new pricing model will also be introduced within the upgrade. The current pricing model becomes an obstacle, especially for developers who must pay high fees for smart contract executions which can cause application development to stall. The new pricing model will greatly reduce the fees required and therefore the fees associated with the deployment and execution of smart contracts will greatly be reduced
Neo 3.0 will also introduce a builtin oracle which will allow smart contracts to talk to the outside internet when needed in execution. This will allow any outside data, such as weather patterns, stock prices, or football scores to be fed into smart contracts to ensure accurate executions. A new virtual machine introduced in Neo 3.0 will be decoupled from the blockchain and become a pure stand-alone virtual machine.
Source: Development roadmap
Furthermore, Neo 3.0 will actually be launched as an entirely new blockchain network which will require users to swap their current NEO tokens for some new ones in a token migration. This is required as NEO 3.0 will come with an entirely new architecture and therefore will need a new blockchain as the current one is not compatible,
Neo 3.0 development is scheduled to be completed at some point in Q2 2020. The team over at Neo has already announced their TestNet after releasing NEO3 Preview1.
We can assume that the majority of the development is happening behind the scenes, however, data from Santiment does show that development continues at a strong pace for Neo;
Neo (NEO) Price Analysis
LONG TERM - DAILY CHART
SHORT TERM - DAILY CHART
What Has Been Going On?
NEO has struggled during the second half of 2019 after dropping by a total of 66% to reach support at the $7.00 level during September 2019. NEO rebounded higher from here, largely due to President Xi Jinping’s Bitcoin-friendly comments, as NEO surged to meet the resistance at the short term .382 bearish Fibonacci Retracement level (drawn in red) priced at $12. NEO has since dropped into support at the 200-days EMA as the bulls attempt to continue with the momentum higher.
Are We Bullish Or Bearish (as of October 2019)?
As of October 2019, we are currently trading within a neutral market. NEO must break up above the $20 resistance zone to be considered as bullish over the medium term. Once NEO penetrates $20 the cryptocurrency is likely to surge aggressively toward the $50 2020 prediction.
On the way up toward $20, NEO will firstly need to break above the strong resistance at $12. Above this, resistance is expected at $13.50 and $15.31 which is resistance provided by the bearish .618 Fibonacci Retracement level. The final level of resistance before reaching $20 is expected at $17.67 provided by the bearish .786 Fibonacci Retracement level. Once NEO breaks above this, it will be free to make an attempt at $20.
Where Is The Resistance On The Way Up TO $50?
Looking at the longer-term charts - After penetrating $20, the next level of resistance on the way toward the 2020 target of $50 is expected closely at $25.25 which is provided by a bearish .382 Fibonacci Retracement level (drawn in blue). This long term bearish Fibonacci Retracement level is measured from the June 2018 high of $57.77 to the December 2018 low around $5.30.
Above this, resistance is then expected at $30, $31.52 (bearish .5 Fib Retracement), $35, $37.82 (bearish .618 Fib Retracement), and $40. If the bullish momentum can continue above $40, the bulls will need to contest resistance at $42, $45, and $46.75 before they are free to make an attempt at the 2020 target of $50.
Conclusion
Neo has a lot of potential behind its project, especially considering that it has an easy route into penetrating the Chinese market. The platform is already superior relative to its competition but the upcoming Neo 3.0 Upgrade will take Neo even further ahead as it prepares itself to provide enterprise-level services. Furthermore, the project partnerships and community support are all positioned to help Neo in achieving mass adoption for the platform.
Neo is a very strong project that can easily flourish in 2020 with the incoming upgrades. I firmly believe that Neo should have no problem in increasing by a total of 378% to reach my 2020 target of $50. Once the bulls can bring the market above the $20 resistance level there is not too much resistance on the way up toward the $50 target.
