Since we last covered Neo on Frontier Protocols many things have happened. But before you read on make sure to go through our post on Neo 3.0 to understand why the upcoming network upgrade could be a real game changer for Neo.
Many of our predictions already turned out accurate in the past two months and yet we still remain optimistic for what is still to come. In the following we look at three indicators that signal why NEO is back in bull market territory.
Indicator 1 – The NEOGAS ratio
GAS used to be valued significantly higher in relation to NEO during bullish sentiment in the market. The reason is that a number of whales enjoy playing the ratio game and shift their bull market profits from NEO to GAS. GAS is much more volatile than NEO and reacts stronger to both bull and bear markets.
This is because GAS is a more illiquid token with an approximately 100 times smaller market capitalization compared to NEO. Therefore price fluctuations can be much more pronounced.
Due to the higher volatility in the price of gas an increase in the GAS to NEO ratio indicates that the market turns bullish. In the chart below we have calculated the GAS to NEO ratio for you based on data from https://www.cryptocompare.com/.
As you can see in the chart the GAS to NEO ratio has recently reached levels not seen since 2019. This indicates the shift in the market sentiment.
Note that we are still far away from the ratio peaks we have observed in late 2017 which indicates that in the current bull market there is still room for both NEO and GAS to climb.
Indicator 2 – The NEOETH ratio
The most important altcoin pair to consider is the Ethereum pair. This is because ETH is still leading the altcoin market dynamics and the ratio on the ETH pair allows to draw conclusions on the relative strength.
Since we last covered NEO in the middle of February 2021 NEO has outperformed Ethereum 100% on the NEOETH ratio.
The temporary weakness of NEO is a thing of the past and blue skies are ahead.
Indicator 3 – Trading Volume
Trading volume is increasing significantly on relevant market pairs in comparison to the bear market levels in 2018, 2019 and 2020.
The recent price increases occurred on historically high volume which is a positive sign meaning that the price increases can be sustained in the course of the bull market.
Is NEO back in Bull Market Territory?
As we all know BTC is still leading the market and altcoins react in the direction that BTC sets. That said NEO has clearly broken out of the bear market patterns as our indicators above demonstrate.
On top, positive signals from a Chinese central bank official have further spurred the bullish sentiment for NEO. Furthermore, metrics for community activity and social media are increasing for NEO.
At Frontier Protocols we firmly believe that we have not yet seen the heights of the 2021 cryptocurrency bull market and consider it therefore as very likely that NEO will climb to new All Time Highs in the course of this year. Yes, NEO is back in bull market territory – enjoy!