It was an expected pull-back after a quick run up to 77K+ satoshis (STEEM-Bitcoin price) a few days ago. Some important technical levels are being tested or have been broken. So let's take a look at where we are now and what we can reasonably expect to happen next.
In this first chart, I want to look at the STEEM-BTC price movement and a few different support lines.
The first thing we notice is that the red uptrend line was broken. This occurred right around 47K - 48K satoshis.
The black line is the current line of support and it comes in around 40K - 41K satoshis.
The blue line is the next level of support if 40 - 41K does not hold. This line is at 36K - 37K satoshis.
The orange line will likely serve as the lowest level of support from the recent uptrend that began about five days ago. This line of support is between 31K - 33K satoshis.
The Fibonacci retracement lines confirm two levels of support (black and orange) at 38.2% and 23.6%. The zero-line, which would be a full retracement, would bring the STEEM-BTC price back to about 1850 satoshis. Again, I don't expect this to happen and I'm fairly confident that if the price breaks the current support level, it likely will not fall below 31K - 33K satoshis.
Also notice where breaks and support/resistance have already occurred and have kept the STEEM-BTC price in its current range, post-spike. The price recently bounced off of the 38.2% line. It will likely test it again very soon.
We also need to pay attention to what appears to be a bearish wedge forming on the charts. The price will need to climb back up between 55K - 57K in order to ease some of the anxiety there. If lower highs continue and the price keeps skirting the 40K - 41K support line, it will likely take a dive below it soon. Keep an eye on volume as well, which has dropped a fairly significant amount over the last two days.
The STEEM-USD chart is nearly identical to the STEEM-BTC chart. The uptrend line was broken and prices have been moving slightly down and sideways over the last couple of days. Current prices are mostly bouncing between $0.75 and $0.90 per STEEM.
It's not all scary and the price can certainly increase and resume its uptrend. It would need to jump above 55K - 57K satoshis in order to do that, so a little bit of work still needs to be done. However, it appears that the price still has a little more correcting to do.
If you're trading right now, you can take advantage of the fluctuating prices and hope that STEEM-BTC remains range-bound. This will provide an opportunity to make some profits and also build up some long-term support for the price. If you're buying long-term, you can probably start averaging in if the price starts breaking lower through some of the support lines.
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're excited to trade this market, good luck to you!
*Charts are from Poloniex and Coinmarketcap.com. Analysis is current as of approximately 12:30pm EST, May 11, 2017.
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