The cryptocurrency markets have been on a wild ride over the last couple of days and the STEEM price has taken a little damage.
With the Bitcoin price on a parabolic rise, most of the alt-coin market took a beating over the past 24-48 hours. The STEEM-BTC price fell through several levels of support and finally rebounded near previous lows after the highs reached on May 8th and 9th. There is a lot to consider at current prices and with the recent activity of the cryptocurrency market.
On the first chart we have the past three weeks of STEEM-BTC price action. The blue line is the previous uptrend line that was broken three days ago. The red line was the new uptrend line that was broken last night. The orange line is the downtrend line from the high on May 20th. The two black lines show a further decrease in volume and the continued negative divergence of momentum.
The STEEM-BTC price is in a clear downtrend from its most recent highs and will need to do a lot of work in the face of higher BTC prices in order to recover and resume its upward long-term trend.
On the next chart, we see a quick double-bottom around 41K satoshis in the past 24 hours (1 and 2), then another touch of the support line about 8 hours later (3). From there, the price recovered and appears to be forming an ascending triangle pattern. Keep in mind that this is a very short time frame, so the pattern may not be indicative of either a bullish or bearish move. However, as I am typing this, the price has moved slightly above the resistance line and is trying to break out around 49K satoshis.
The STEEM-U.S. Dollar price that was in an ascending triangle pattern made a false breakout above the resistance line, then fell below its most recent uptrend line. It found support around $1.08 - $1.10 and is currently trading just above those prices at $1.17 at the time of posting.
How do we interpret this data?
With Bitcoin prices quickly rising and then making rapid swings in trading today, it's hard to say how this will continue to impact the rest of the crypto markets. When the BTC price began to really take off last night, the rest of the market didn't stand much of a chance. Bitcoin is still strong and commands a lot of attention from traders and investors, so we always need to be aware of how the token is trading.
The STEEM-U.S. Dollar price took some damage by breaching its uptrend line. If it can hold the support line around $1.10, the price should still be in good shape going forward. If it falls through that target, there is stronger support right around $1.00 that should catch it.
The STEEM-BTC price is sitting in a precarious position right now and may end up trading in a lower range, as it did before the highs during the past week.
The first upside target to clear will be 50K satoshis, followed by the previous support/resistance lines at 53-54K and then the range between 58K and 61K. I don't expect it to reach that high in the next couple of days, but if it does, then 65K would be the upper level of resistance.
If the price should break down again, the floor is right around 40K satoshis. A break below that line could send prices down to 37K and 33K below that. Unless Bitcoin can muster another powerful rally and attract the bulk of traders' attention once more, I don't expect to see that 40K line breached in another leg downward.
These are certainly some interesting times to be involved in cryptocurrencies and with an influx of money and attention, a lot can go wrong...or a lot can go right. Be careful with your trades and try not to get swept up in the hype and make a FOMO buy or get scared into a panic sell. Pick your targets and execute your orders based on the percentages that your willing to lose or lock in as profits.
If you're trading, always remember:
Never invest or trade what you cannot afford to lose and put tight stop-losses in when prices creep lower towards the support lines.
As always, if you have any critiques or comments about my non-professional analysis, please let me know. If you decide to trade this market, good luck to you!
Disclaimer: I am not a professional adviser and this info should not be used for trading. These are only my interpretations and opinions, and while I would be flattered that you think so highly of my fairly basic analysis, it would not be prudent to use this for transacting/trading with real money.
*Charts are from Poloniex and Coinmarketcap.com. Analysis is current as of approximately 10:15pm EST, May 25, 2017.
