Wow, Steem is up over 300% in the past week.
There are positives and negatives to this kind of price appreciation. It makes payout's larger in dollar terms, and gets the Steemit platform a good amount of attention that will result in increased user numbers. However, often a large dump can see a crypto currency sold into obscurity never to be seen again. I don't think that will happen with Steem, however I thought I would give a traders (Oil Trader by day) analysis of the market conditions...
24hr Traded Volume on Bittrex is over 3 times larger than it was yesterday at $120,000+ showing that the most recent acceleration in price was on large buyers pushing the price higher rather than trading on low volume.
One thing to notice is that we have seen some acceleration with larger candlesticks being formed at the top of the move. This signifies that the market is starting to rebalance with large buyers and sellers battling with each other to get there volume done. I would expect to see either consolidation (sideways movement) or a re-tracement (small fall in prices) following this kind of price action 'alone'.
One further thing to notice is that there is far more volume on the bid than the offer;
There are 12m+ Steem on the bid, and 47,000 on the offer. This is a very bullish signal. The buyers (volume) outweigh the seller by a factor 255 to 1. This alone should prevent any impending dump which is great news for Steem believers.
This really shows the genius of the structure on Steem, Steem Power and Steem Dollars that was setup by the founders of this site. Stability is key, and with the 'vast' majority of Steem held in Steem Power, the market cannot be flooded with sellers at a moments notice, however high the price goes. The higher the price goes, the more users Steemit will attract, the larger and more engaging community Steem has, the more valuable the platform will become.
There is a limit as to how high the price will go in the short term. At a certain price users will begin to Power Down their Steem Power to cash in profits. This will rebalance the market, which is currently massively outweighed by buyers.
Overall I think if we see 0.0013 trade, this will be a strong buying signal with resistance at 0.0012 broken significantly, however a break of 0.00094 (previous blip on the chart) would signify the end of the rally, and maybe a time to cash in some Steem (that being said, the imbalance of volume could turn this market higher at a moments notice, so I would stress the word 'some').
Since I started writing this article, another $15,000 in volume went through Bittrex. This is half the daily trading volume I have seen the last few days (done is 30mins). There has clearly been a big demand shift for Steem. Probably a bunch of cryptocurrency traders with FOMO (fear of missing out). Expect high volatility over the next few days.
Steem on the offer is still falling too. Now just over 34,000...
