- Crypto markets tank as tensions in the Middle East boil over.
- Monday saw crypto markets recover from the sell-off.
- NEO leads the crypto market bounce.
The cryptocurrency market was rocked over the weekend as geopolitical tensions between Iran and Israel sparked a widespread sell-off. The conflict led to a staggering $440 billion in outflows from the crypto space, with market leader Bitcoin plunging to a 3-week low of $60,700. Many altcoins suffered double-digit percentage losses as investors fled to safety amid the crisis.
World leaders scrambled to prevent the conflict from spiraling into a full-scale war, but crypto markets were uncertain and volatile. However, easing tensions saw crypto markets bounce back on Monday, with “blast from the past” project NEO leading the top 100.
NEO Leads Crypto Bounce Back
With Middle Eastern tensions appearing to ease, Monday’s crypto bounce was led by NEO. The cryptocurrency has surged 36% over the past day, hitting an intraday high of $23.40 to lead the top 100 cryptocurrencies.
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NEO’s price began trending higher in January, which is in line with many cryptocurrencies. However, NEO’s uptrend took off on April 8 with a 45% upside swing on the daily candle. This sparked a move that saw the project hit $23.92 by April 11, marking a 106-week high. The weekend crash had threatened to interrupt this momentum, but NEO found solid support at $14.73 on April 13, leading to a resumption of the uptrend.
NEO’s recent outperformance of the rest of the market can be attributed to several key factors underpinning the project’s strength.
Is the China Crypto Crackdown Over?
Recent developments in the NEO ecosystem support the token’s overperformance, including the growing ecosystem of projects building on the NEO X sidechain. NEO X is an EVM-compatible sidechain which launched its pre-alpha testnet in late 2023. It incorporates NEO’s dBFT consensus mechanism to provide developers with a bridge between the NEO N3 mainnet and the widely adopted Ethereum Virtual Machine.
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Several projects have joined the NEO X ecosystem recently, including “consumer-first L1” Tria, and the SoFi project Pop Planet.
There is also speculation that NEO’s resurgence is tied to a broader shift in China’s stance towards cryptocurrency, signaling a potential softening of the country’s previous crackdown on the crypto industry.
NEO is China’s first government-approved blockchain project and was one of the few projects supported and allowed to continue development during the crackdown, China’s changing stance bodes well for NEO’s prospects.
On the Flipside
- It is unclear whether tensions in the Middle East will lead to a further escalation involving Russia and the US.
- The weekend sell-off demonstrated that markets view cryptocurrency as a risk-on asset.
- Although legacy markets were closed on the weekend, the gold–backed crypto PAXG, which follows the price of gold, spiked to $2,900 at the height of the tensions.
Why This Matters
As investors continue navigating the volatility, NEO’s outperformance offers an intriguing case study on the potential for OG cryptos that have faded to stage a comeback. While Chinese backing is a speculative narrative, there is no denying NEO’s technological progress.
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