After a blockbuster start to the year, Nexo’s (NEXO) price is trading near the record highs printed recently. Here, we take a look at where the coin may trade in the coming months.
What is Nexo?
The team that founded Credissimo, also created Nexo. The team behind the platform states Nexo is the most advanced platform for instant crypto loans and the only blockchain company to provide its services in 40+ fiat currencies and in more than 200 jurisdictions.
Nexo lets clients use their holdings as collateral, then withdraw cash. Instead of just buying and selling crypto, Nexo was created to provide clients with instant crypto loans. Nexo promises no hidden fees, no capital gains taxes, and no credit checks.
Like other cryptocurrencies, the platform uses blockchain technology, smart contracts, and algorithmic procedures, all of which are performed in its native Nexo Oracle module.
The client can request loans in either USD or EUR currency but first must transfer their crypto holdings to their Nexo wallet. The Nexo oracle will establish the loan after the transferred cryptos are confirmed by the blockchain.
Nexo says its users can access instant cash and be able to store the coin in any Ethereum compatible wallet.
How Nexo coin price has performed so far?
The Nexo price is up about 400% year-to-end (YTD). Like some other cryptocurrencies, Nexo has witnessed a sharp move higher in the price of its native token amid accelerating crypto adoption.
In a year where Tesla, Mastercard, Visa, PayPal, and others, embraced cryptocurrencies and their underlying blockchain technology, Next price has managed to ride the bullish wave and print record highs of $4.21 in May.
The last month, when the Nexo price closed in the red, was September. In February only, Nexo saw its price explode nearly 150%. This signals an extremely strong bullish run that helped the digital asset to take its market capitalization to over $2 billion.
Where next?
From the technical analysis viewpoint, it’s quite difficult to predict where the Nexo price will go next given the magnitude of this move higher in 2021 so far. As no moves in financial markets take place in a vertical manner, although this year’s Nexo price action suggests otherwise, it is likely that investors will witness a market correction as bulls take profit.
Nexo daily chart – Fibonacci retracement lines (Source: TradingView)
In this space, Fibonacci retracement lines help us see to which point the Nexo price could potentially correct. The first major retracement line of 38.2% comes in at $2.63, which is about 30% lower compared to the current market price. This region will also host the 100 daily moving average (the blue line) soon, which is rapidly catching up with this bullish market.
Nexo daily chart – A potential double top chart pattern (Source: TradingView)
Moreover, the price action has created two equal tops above the $4.10 mark. A break below the neckline (the middle blue line) would activate the double top chart pattern. This is a bearish chart formation that could threaten to take the price action to below $2, where the measured target of the double top formation is located.
Nexo daily chart – Fibonacci extension lines (Source: TradingView)
Looking higher, the Fibonacci extension lines help us measure potential targets in case the market breaks out to the upside again. In this case, Nexo bulls will be targeting moves to $4.45 and $4.85, where 127.2% extension line and 161.8% extension line are located, respectively. It is yet unclear whether a trip to these levels occurs soon, or the Nexo price action will first consolidate at lower levels before continuing higher.
Of course, much will depend on Bitcoin and how the world’s largest cryptocurrency trades for the remainder of the year. Don’t forget that BTC weights about 45% of the total cryptocurrency market, hence any bigger move in Bitcoin is likely to yield major moves across the cryptocurrency market.
Summary
After a rapid move higher in the first four months of the ongoing year, Nexo bulls and bears are expected to continue exchanging blows in 2021 as the price action heats up. While the bulls have clearly won the opening rounds, a market correction could yield more uncertainty into the year-end.
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