In my STEEM analysis few days ago I hypothesised that STEEM/BTC will not revisited the highs at 0.0075 this year. Here are the cliffnotes of that article. It took around one month for Steem to lose over 61% of its value. This is a relatively small amount of time and points to a classic chart of bubble gone bust.
It is highly unlikely that we're going to see STEEM resume its upward trajectory after such a sharp fall, at least for the next few months. In fact if the previous BTC crashes are any guide, the recovery may takes years.
In the past three days we got more confirmation that we’re now in downward trend. See the 2 Hour chart below. Prices rallied to a high of 0.003246 on Poloniex four days ago only to be met with heavy selling. We’re now quoted at 0.002467, close to where we were before the spike higher transpired.
This reverse V-shaped price formation is a bearish signal. The large pinbar in the middle is not helping things either. It shows that the buying pressure lasted only for a short period of time before it was overwhelmed by selling.
This is exactly what you would expect to happen during bear market rallies. As I said in my previous STEEM/BTC analysis, basic market psychology is at play here. The fast decline likely caught many by surprise. Plenty of people stayed on the sidelines waiting for a bounce. If we start moving higher these traders will start to dump the coins they're holding and the higher we go, the more the selling will intensify.
A continuation of the downward trend now seems likely. Possible support on the way down can be found at this month’s low of 0.002262, closely followed by the round 0.002 level. Further down we have the 0.00168 high, the breakout point for the current bubble. A revisit of this level may be met with some buying pressure, at least in the short-term.
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My previous STEEM/BTC analysis can be found here https://steemit.com/steem/@forextrader/usdsteem-btc-not-revisiting-the-highs-this-year-if-ever-technical-analysis-bittrex-august-15