NEO- There is a reason you keep hearing about it

Being very weary of “hyped up coins” is very much needed in this marketplace. I won’t add to that hype with any random figures and promises of 10,000% increases. Let’s just take a look at price and the information currently available to us.

Here are just a few points that have my attention:

  • The re-brand is just getting started. Changing the name isn’t the only step. We should be seeing much more information to be available about NEO on August 8th. When asking Wentao Yan, VP Business Development of NEO, about their road map and about the potential of the project, this was his response:

“We’ll issue our updated white paper soon and it will show you what we’ll do, how we are going to do, and when it can be done. As for true value, true value is not fixed numbers. If some project had a big rise and then the team thought we are good enough no need for trying new things, I would say bear market following months is normal. Our team is consistently working on the project trying to raise true value.”

  • “True value” — That quote really puts a lot of these other projects into perspective. In most occasions, projects are introduced and the majority of the funding is funneled towards marketing. As efficient as that is for raising capital, it takes some of the drive away from the goal of adding real value to the blockchain sphere. Antshares/NEO have kept their heads down into the development of their tech and it is beginning to pay off.
  • The phrase “Ethereum of China” is thrown around a lot, and I mean a lot. While it is true that China does prefer to have their own version and adaptations to technology, at this time the government has made no official confirmation one way or the other. When a clear winner in China is made known by pure adoption and market share, they will most likely be crowned a winner by being supported at least in part by the national government. When taking a look at all of the competition, NEO stands far above the rest currently. Here is what Wentao Yang said when asked about it,

… As for backed by government, no official confirmation. Chinese government is now taking an open attitude, but do not yet announce to support any specific project. Government will probably wait until one good project win from the market competition to give official support”

  • Just take a look at Ethereum’s ICOs and the capital they have brought into the marketplace. Add that together with the investment opportunities in China and you have quite the possible result. Everyone knows the effect ICO’s have brought to cryptocurrencies. The potential to open that up with a technology based in China is incredible to think about.
  • Another point about “Ethereum of China”, they do have their differences. Security is always a major concert when dealing with cryptocurrencies. NEO has built in Multi-Sig vs needing to implement as a smart contact with Ethereum. Also, NEO plans to support multiple programming languages for implementing Smart Contracts. Ethereum currently only has Solidity. This feature alone, if implemented, can affect the dynamic of the industry. Companies handle complex projects with everyone not possessing the same skill set and knowledge of programming languages. This could open a lot of doors, instead of having to know multiple languages, you can rely on the few you excel at.
  • Developers- They currently have 6 full time devs in Shanghai, among them two are core developers.
  • Low market cap, as I have said before, doesn’t mean everything. Yet, it does mean something. The price per coin is still low compared to scale, reputation of the team, tech and goal of NEO.
  • August 8th — NEO 2.0 launch, the new website, upgrade to all the non-consensus nodes, and updated client.
  • August 10th — Presentation including, their new Smart Contact Tech, Development Roadmap and a Q&A, all at 7:00 PM

The Price Action

As much as I personally believe in the future of NEO and their team, we just took some profit on our core position. We didn’t base this trade on “hype” or any news surrounding the community. We took profit because of what the chart told us. Price hit a well held, previous swing level paired with an oversold cycle on the RSI and Stochastic, all the while breaking out of the EMA wave bands.

If you are unaware of our process on trading by adding and reducing position size, I would recommend reading the post about the method here. We trade around a core position.

We will keep a core position in this market because of the team, tech and goal of NEO. This doesn’t mean we should by-pass ways to build our positions and take profit.

Taking a look at this chart below, you can see the relatively quick move up and subsequent retrace. During this pullback, we use it to continually add to our core position.

Every pullback isn’t a “crash”. The amount of times I was asked by someone, “Should I sell now?” is incredible. This isn’t the right mentality to have when trading. Taking a step back and looking at the entire move up and cycles you can clearly see the natural movement of price. Asking should I sell or buy at a certain price isn’t the right question. You should be asking where in the cycle is the market currently. When you figure that out, you will have your price.

Re-tracements naturally happen as people take profit. This is the time you should take advantage and listen to the chart. We were able to add on all 3 of the large pullbacks on the chart above. Even when we were seemingly late to the party with our first entry at ~$9 on the first large move up, we worked our position to become positive.

Still working that Ripple position…

Our position is currently doing well, even when we initially added at an unfavorable spot. We didn’t panic sell into the lows.

A little about me now…

Before joining CG Capital, I spent almost a decade trading US Treasuries and building out a successful institutional analysis and fixed income trading business. I have covered all the primary dealers, large buy-side money managers and hedge funds. My financial career began at Charles Schwab as a trader in the equity and options markets before moving to the sell-side to trade fixed income at vFinance, JVB Financial, and CG Capital.

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