All the active traders are thinking of Bitcoin ETF decision on August 16 by SEC.
Due to very positive commentary on Bitcoin ETF, it looks like SEC can make a positive decision on the ETF. However, they can take more time to make a final decision on ETF.
In the meantime, speculators got a momentum to pump up BTC. As of now, it almost reached $8K. The pump can go on and BTC can double by August 15, who knows.
However, traders who trade frequently are thinking to ride the BTC ETF speculation. They are selling their altcoins holding, such as STEEM and buying BTC. Therefore, altcoins are falling further which is little bit awkward since BTC and altcoins move together.
However, this scenario has happened earlier when BTC rose from $5K to $20K back in November to December, 2018.
So, what can happen next?
Once BTC settles to high value or, BTC is not moving higher. Those traders who sold their altcoin positions will buy back. This can lead to a big altcoin pump similar to January pump of STEEM and other altcoins.
Traders are always in motion. Trend traders don't care much about fundamentals of a coin. They just follow trend. They buy up a random coin when it goes up for a reason, some cases, no reason.
It is interesting that at this low price of STEEM, there are some investors who is sucking up the newly minted STEEM. STEEM has higher inflation than other coins to reward new users or new contents. Therefore, it needs high growth in investors to keep its high price.
Therefore, STEEM can't sustain high pumped up price for long. For example, if it reach $5 suddenly, then large number of SP will be powered down to be sold in the open market. STEEM price will return to a lower support.
It may give an advantage to STEEM traders who hold liquid STEEM. It is a tricky position since holding SP and delegating to bots can earn 20-30% yearly return. However, selling at $8 and buying at $1.25 will give someone 6.4X more STEEM.
Similarly, if SMT has a speculative date for release, it can be pumped in similar fashion. If it timed with secular bull run of BTC, then STEEM can be pumped to 3-4X in a month or two. Similarly, it will fall sharply after the release and then can rise organically due to success of SMTs and other projects.
However, this type timing is hard even for an experienced and shrewd trader. And, investing is different from this month to month short-term trading. In year two or three STEEM's price floor can be $8 or $15.
Therefore, it is a dilemma for investors to HODL or trade. However, for content creators who need to sell STEEM for a living or side income, need a buffer savings of 6-12 months. If they need to sell daily or weekly basis, it will hard for them to have a good price. It would be better to wait for good run of STEEM, then sell and wait/live on other times on the buffer income.
STEEM is still distribution phase and its major upgrades are ahead. Therefore, it is also great time to buy considering its all time high price was 5-6 times higher.
Disclaimer: This opinion is not a financial advice, it my personal perspective and opinion. Please seek professionals for financial decisions.
Image sources: Most images are open sourced (e.g. Pixabay, Wikimedia etc.) with Creative common license. Some images are used with due courtesy to respected owners.
Thanks for reading.
Cryptominer since 2013, occasional trader and tech blogger
