Meta: Should you invest in Steem now? Lets look at some Technical Analysis, shall we?
Hype & Correction
During the hype and shortly after Poloniex listed STEEM, the price soared to ~0.007. Today, you can buy STEEM for ~0.0036, which is about 50% off.
Should you?
Lets look at some technicals.
We have been in a steady downtrend for the past 10 days.
Although I don't like "catching the falling knife", that is, buying assets whilst they are in a downtrend, 50% haircut is a modest correction.
Average buy-in price is 47% higher
The green and red horizontal bars on the left side of a chart represent a volume histogram. This is a very useful tool, as it tells us how much volume there was at each price level. This information is very useful for determining future resistance areas. If we have a reversal, and start rallying again, expect some resistance starting at .005 area.
The red horizontal line spanning across chart represents a volume weighted average price. We can see that the majority of people bought in at the average price of .0053, which is 47% higher than the current price. OUCH.
Flibbr's Oscillator is oversold
I like to think of oscillators as pendulums. They are not leading indicators (meaning, they don't have any predictive power per se), but they do tell us, relatively speaking, where we are in the short term cycle.
The oscillator on the chart is Williams %R (inverted stochastic oscillator), overlayed with its own 21 period EMA. Currently, it looks like its setting up for a reversal.
Volume
Steem has surprisingly small volume footprint in compare to other coins in the similar market-cap bracket.
Both Litecoin and Ripple have more than double the daily volume, despite having smaller market caps.
This leads me to believe one or more of the following may be true:
- A bottom hasn't been reached with conviction.
- There is no panic selling going on.
- Stakeholders are not willing to sell.
- Stakeholders are not able to sell (perhaps due to vesting).
Verdict
The current price is a tempting entry point. I have made several Steem purchases today and yesterday in the area of .0042 - .0037. I do not feel confident for a large entry yet, but I do think this is a good time to pick up some Steem, if the intent is to convert to SP and hold for the long term. I have therefore accumulated 16% of my total desired position size, and will be buying more, if the price keeps dropping.
Please note
I am not your financial advisor and this post is not an investment or trading advice. The above post merely represents my opinions, which could be factually wrong. Please conduct your own due diligence before investing.
#money #trading #steem #investing
Full Source Code of The Rational Flibbr Indicator:
//* Full credits and appreciation to The Rational Flibbr Indicators Creator
//* flibbr : flibbr.com : @flibbr
//* Consider tipping flibbr
study(title="The Rational Flibbr Indicator v2", shorttitle="The Rational Flibbr Indicator v2")
useCustomTick = input(false, title="Custom ticker? [Y/N]", confirm=true)
tickCustom = input(title="Symbol [e.g. BTCCNY:HUOBI]", type=string, defval="")
useCustomRes = input(false, title="Custom time interval? [Y/N]", confirm=true)
resCustom = input(title="Time interval (W, D, [min])", type=string, defval="")
tickery = useCustomTick ? tickCustom : tickerid
res = useCustomRes ? resCustom : period
source = security(tickery, res, close)
length = input(21, minval=1, title="Will")
upper = highest(length)
lower = lowest(length)
out = 100 * (source - upper) / (upper - lower)
len = input(13, minval=1, title="EMA")
out2 = ema(out, len)
Flex = input(3, minval=1, maxval=10, title="Cross flexibility [1-10]")
Sup = input(-20, minval=-100, title="Level of stupidity UP")
Sdown = input(-80, minval=-100, title="Level of stupidity DOWN")
HCross = input(defval=true, type = bool, title="Highlight crossovers? [Y/N]")
BGcoloring = input(defval=true, type = bool, title="Background coloring? [Y/N]")
Transpa = input(65, title="Background color transparency [%]")
Will = plot(out, title="Will", color=#19193E, linewidth=1)
EMA = plot(out2, title="EMA", color=(out2[0]>out2[1]? green:red), linewidth=2)
plot((HCross and cross(out, out2) and out2 >= (Sup-Flex)) or (HCross and cross(out, out2) and out2 <= (Sdown+Flex))? out2 : na,title="Cross center", color=black, style=circles, linewidth=2, transp=80)
Me still waiting for that July 4th dump
Yep, I'm waiting for it too))
Great post and thanks for explaining it all. :)
The problem with the marketcap number is it's not accurate. There are not 99M coins in circulation as @bacchist pointed out here. The volume is really low which might indicate things are over priced and few can get out of their positions anyway because of the vested nature of Steem Power. Maybe that means loss aversion will kick in and people will work that much harder writing great content and encouraging others to join (while maybe also buying in even more). When bitcoin danced around between $3 and $30 or $50 and $120 or $250 and $1200... it was all part of the process. Maybe Steem Power will prevent such wild swings? At the same time, people really don't like to see long, slow, extended declines like we're seeing now. Either way, grab some popcorn and buckle in. It's going to be a wild ride.
Most of the new coins go trough a speculative pump and dump early in their lifecycle. Without vesting, the correction might have been a lot more violent. I like the idea of not being able to power down right away. It prevents regular people from hurting themselves (ie. panicking and selling at the bottom).
Yeah the power down process is really well thought
Thanks for this part analysis. The market cap isn't accurate because only a fraction of STEEM is available for circulation. When only 5% of a market cap is in circulation, it would be surprising to see any sort of volume in line with coins at the same market cap...
My interpretation is that given all the TA done above, along with the fact that only a fraction of the market cap is currently available for trade, STEEM will continue to see a steady decline until it finds a support level. This may take a while. Recommendation: wait for the market to sell itself out before buying in. Good luck!
[Mistake - Edited]
Can you elaborate please, what do you mean by that?
Made a comment stating that you won't receive full payout for your post, because of the discussion about post edits, We thought that editing posts was weighted by the system as same as making new ones.... anyways we got the solution, It's not true, edits do not count as a "new post".
Do edits reduce payout?
We found out, that they don't reduce payout!
Good post
Given the liquid STEEM in existence, it's no wonder volume is low.