You may have noticed recently that Steem's price has been falling off a cliff. Since peaking at over $4 in late July, the price has been following a downward trend and is now under $1. So why is this and what can you expect?
What it was like pre-payouts
Before July 4th, Steemit was a very small, interesting and rather insignificant project for most of us here. There were a few cryptonuts here, a few people from Bitshares as well as people like 
It was very much a small community - everyone was really there because they had something interesting to say and contribute. We saw these dollar numbers for our article. But it didn't really feel real. We couldn't really see or access those numbers, we were just getting some cryptocurrency at some point. But we were more interested in helping each other and contributing than thinking about dollar signs.
Then Steemdependence day came
On July 4th, everyone's articles were paid out. And wow! We suddenly had all these Steem Dollars that we could sell on exchanges. We also had a bunch of Steem Power - which was like having shares in this amazing new social network.
At this point the price was lagging around $0.10-0.30 cents/Steem.
All of sudden Steemit got press from CNBC, The Guardian, Yahoo Finance, as well as the Cryptosphere. We had all kinds of high-profile guests sign up. Unsurprisingly the price went through the roof. The site went from 50 signups a day to over 2000 signups/day. It was nuts. The price rocketed. $1, $1.50, $2, $3, $4. I think there were some brief moments where it reached $5. But whatever.
The Steemship was overhyped
While the site was (and still is) growing rapidly - the valuation went up too fast. It was overhyped, there was a lot of speculation and "hot money". It didn't justify a 30x price increase in the space of a few days.
The long-term fundamentals of Steemit still look great
Steem as a crypto-currency is way better than bitcoin on so many levels. It can handle more transactions. The social network element of Steemit is the "killer app" that will bring in new users to cryptocurrency.
Steemit is an amazing social network too. It rewards developers/creators/contributors/storytellers for building additions to it. Then it gives rewards depending on the votes of people who've earned and contributed the most.
On a deep deep level Steemit is built to be self-sustaining, self-growing, self-powered. It's in it's DNA to evolve, grow quickly, solve problems and deliver lots of value in terms of content/engineering.
However in the short term I feel Steem has been way too overpriced.
"Hello gold-diggers!"
Many people have signed up to Steemit as a "get-rich-quick" scheme. They have only thought about "me me me", without offering any original content, ideas, community support, promotional help. Anything.
Unsurprisingly, they've only earned change for their posts. And boom! They get mad. Then they post about how Steemit's a scam. Blah blah blah. They just didn't provide value for the group. They had nothing to say. So they earned nothing. Nobody is going to pay for you to whine about how you got paid nothing for whining.
I've been powering down
I have no shame in admitting that I've been powering down the past few weeks. I felt like the valuation was too high. I also needed the money to pay off debts.
I expected (and even wanted) the price to go down. Mostly because that would flush out the speculators and get-rich-quickers. And the people who stick around are the ones who contribute and who are genuinely interested in seeing Steemit grow as an interesting social network.
What's next
At the current price of $1 steem, I don't feel it's THAT overpriced. It probably has further to fall, but I suspect it will recover. There's still a lot of momentum here. The regular contributors are still contributing regularly. There's some marketing campaigns going on, people share it with their friends. Google is ranking the best articles (bringing in new traffic from search). High profile bitcoiners and other big cheeses are coming on board.
Like all growth, there are periods of expansion and contraction. We're just in a contraction phase at the moment where the wrong people are leaving..
I believe that soon enough we'll be in a phase where Steem takes off again.
I think the catalyst will be someone super-high profile joining
When someone like Julian Assange arrives Steem will go to the moon. Get him to write an article "How Killary Clinton tried to assassinate me" - and voila. The world's press will be crawling over this site and giving this site tons of indirect attention. Steemit's infrastructure and community will grow at an unrivaled rate. We'll all be enthralled and very wealthy.
In summary, Steemit's valuation is coming back to earth
The hot air is disappearing from the Steemit bubble and it's current price is a fairer valuation.
The price might still have further to sink before a recovery. It might rocket. It may never recover. Anyone who can accurately predict prices is lying (or is very rich).
But personally, I think this is the quiet before the attention-storm. I suspect the price will recover. If you make valuable contributions now before the mainstream heavy-hitters arrive - then you'll be well rewarded.