Recently, a new wave has set off in the digital currency market. NEO, Ontology, and VeChain seem to be recovering rapidly, attracting widespread attention. These three major digital currency projects have attracted much attention in the blockchain field and have shown strong development momentum. Let us delve into this new trend and explore the reasons behind it and its future development trends.

After the recent market downturn, some of the most prominent Chinese blockchain projects appear to be recovering quickly. The following technical analysis evaluates whether NEO, Ontology, and VeChain have the potential to grow further.

NEO

Over the past two weeks, NEO’s value has plummeted by nearly 38%. The cryptocurrency traded from a high of $13.45 on November 13 to a low of $8.41 on November 25.

Despite the massive sell-off, NEO was able to quickly rebound to the 75% Fibonacci retracement level. It is now trading within the 65% and 61.8% Fibonacci retracement zones. Many traders view this Fibonacci retracement area as a "golden" retracement area due to the high likelihood of a rebound.

A spike in trading volume near current price levels could see the cryptocurrency surge higher and test the next resistance level at $10. The price barrier represents the 50% Fibonacci retracement level. However, further increase in demand could push NEO towards the 38.2% Fibonacci retracement level at $10.86.

NEO/USD by TradingView

The TD Continuous indicator adds credibility to the bullish outlook. The technical index is showing a buy signal in the form of a red 9 on both the 1-day and 12-hour charts. A bullish signal can be verified by two green candlesticks trading above a previous green candlestick at any point in either time frame. If this happens, NEO could surge one to four candlesticks higher or start a new bullish countdown.

The combination of the red 9-bar candlestick with the rotating top on the 1-day chart and the reversal doji on the 12-hour chart strongly suggests that NEO is preparing for an upswing.

NEO/USD by TradingView

Nonetheless, if the selling pressure behind the cryptocurrency picks up, allowing it to close at recent lows of $
Below 8.41, further revisions will be made. NEO could fall to the next support level at $7.80 and even lower to $6.70.

Ontology (ONT)

Ontology is one of the cryptocurrencies that has benefited most from Chinese President Xi Jinping’s decision to embrace blockchain technology. Following the announcement, ONT surged nearly 120% to a high of $1.19 on October 27.

Although China drove the cryptocurrency into bullish sentiment, less than a month later it plummeted to levels where it began to soar. This is a clear example of the classic pump and unload scheme.

TradingView ONT/USD

Now, Ontology is showing some bullish signals on its 12-hour chart.

During this time frame, a bullish divergence formed between the relative strength index (RSI) and ONT price. Divergences occur when an oscillator like the RSI disagrees with actual price action. Therefore, the RSI makes a series of higher lows while price falls, indicating that the trend is improving. Moreover, the chances of the trend changing from bearish to bullish increase.

TradingView ONT/USD

Additionally, the Moving Average Convergence Divergence (MACD) is starting to turn bullish. This technical indicator follows the path of a trend and calculates its momentum. When the 12 to 12 hour exponential moving average gets closer to the 26 to 12 hour exponential moving average, the crossover probability increases. This bullish crossover usually results in higher prices.

TradingView ONT/USD

A series of support and resistance levels can help determine whether the body is necessarily subject to bullish impulses.

A close could break above the $0.635 resistance, while increased demand would see ONT test the $0.73 barrier. From then on, the cryptocurrency will have to face the next resistance levels at $0.83 and $0.93.

Conversely, Ontology may continue its bearish trend if the previously mentioned bullish signals are invalid. Therefore, a close below the $0.55 support could trigger a surge in sell orders, taking the cryptocurrency down to $0.50 or $0.45.

TradingView ONT/USD

VeChain(VET)

VeChain has been enjoying a healthy upward trend following rumors linking it to China's rollout of a national vaccine tracking system. The company is said to have been developing drug traceability, monitoring, security and auditing solutions for the country's pharmaceutical industry since 2018. The platform will launch in March 2020.

Investors appear to be backing the cryptocurrency as the true utility of VET is brought to light. VeChain is up 113% since late October and marks further growth.

The bullish momentum appears to have developed on the 1-day chart of VET, triggered by a golden cross that was technically triggered by the 7, 30-day and 50-day moving averages. A potential bullish breakout is signaled when the short-term moving average crosses above the longer-term moving average. Many investors view this pattern as one of the clearest buying signals that could begin a long-term uptrend.

Although VeChain recently retraced over 40%, the 50-day moving average was able to act as support, allowing the cryptocurrency to rebound. Now, VET is back above the 7-day moving average again, which is a continuation of the bullish trend.

VET/USD by TradingView

Likewise, the TD Timing indicator shows a buy signal on the same time frame. Based on this technical indicator, the moment a green two candlestick trades above the previous green one candlestick can be considered a bullish signal.

VET/USD by TradingView

If VET is indeed about to continue its uptrend, it must first settle above the 38.2% Fibonacci retracement level. If this happens, then it may attempt to test the next resistance level near the 23.6% Fibonacci retracement level.

Nonetheless, a close below the 50% Fibonacci retracement level could jeopardize the bullish outlook. Following this downturn, the Fibonacci retracement levels will drop further to 61.8% or 78.6%.

VET/USD by TradingView

overall mood

Even though the entire cryptocurrency market has experienced a massive sell-off recently, these China-based coins appear to be recovering soon. Currently, NEO, Ontology, and VeChain are putting up bullish signals, suggesting that bullish impulses are being fueled.

Despite the bullishness seen on these cryptocurrencies, it is always wise to wait for confirmation before placing a trade. Moreover, one must be cautious about different support levels that could fall below and trigger a sharp decline.