As I stated in my previous post – and if you’ve been following my analyses for the past few weeks – I’ve mentioned that the low trading volume of STEEM can be problematic for the price action. A few large trades can have a significant impact on prices and trends. Well, yesterday, we had a few large trades that sent the STEEM price straight through both the 1-month uptrend line and established support at ~$0.16.
The uptrend line has been broken and we see that the price has broken from its ~8-day trading range, falling through the ~$0.15 - $0.16 support which had caught it several times over the past month. Once again, we can see the rather large spike in volume, then a return back to the relatively low trading volume. This is typical of a single large trade or a small handful of large trades.
If we put our more technical hats on, we can see that the Fibonacci retracement line at 23.6% has now been breached as well – a line that coincided with our uptrend and mid-term support. Breaking these critical support lines should point the STEEM price to the next line of support. It may catch some support at ~$0.12 - $0.13 (blue line), but it’s not very strong at those prices. More than likely, we should see a push down to the $0.10 range through the rest of the week, which will bring the retracement all the way back to the zero line.
Based on the Poloniex depth chart, buy orders are looking thin until we get to prices near $0.11 and $0.12. Even then, at the lower price, total standing orders are approximately $25,000.
I did say that I expected prices to test the ~$0.15 support line on Tuesday and that we’ll likely see prices test $0.10 by the end of the week if that line did not hold. Well – after several successful defenses of that line, it didn’t hold late on Monday and could not fight its way back to it on Tuesday. That line will now likely become the new resistance for the STEEM price for the near future. For those who have been waiting for the lower prices to stock up on cheap STEEM, you’ll probably get your Christmas wish.
This isn’t the time to panic and leave if you can afford to stay in. It’s possible that we may never see STEEM prices this low. It’s also possible that we may never see STEEM prices as high as they have been in the past month. There are no sure things, but we need to build a foundation if we ever want to give this a chance to succeed – and you can’t build a solid foundation if you’re constantly chipping away at it.
I don’t want to tell anyone what to do with their money and I certainly don’t want to tell you how or when to trade. Just go with your gut and do what makes you the most comfortable. This isn’t the season to stress about your money. (In my opinion, money isn’t worth that much stress in any season.) Look at this as an opportunity and a way to build up some fortitude. If we make it through, we’ll all be much better off – the community/currency will be much stronger for it.
If it does happen to fail...well...at least we had a fun ride, made some friends along the way, and it was a great learning experience. There are worse things in life. But I remain optimistic. We’ll see better days. I can almost guarantee it.
*Charts are from Poloniex. Analysis is current as of approximately 12:30am EST, December 21st, 2016.
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