There's a pretty good indicator suggesting that the recent gains in STEEM are likely to hold...

STEEM is up some 10% today, and more than 100% over the last two weeks, currently trading around $.44.

This is the highest level STEEM has seen in a long long time, in fact, it's pretty much the highest we have seen since the bear market took us below that level in late 2018 and early 2019.

While some may be looking to take some profits, I think the gains are going to continue.

Not even taking into account past altcoin patterns and how likely this is just the beginning or anything like that, there is another metric to watch that tells me these gains are likely to hold and keep going higher.

What metric am I talking about you may be wondering?

The SBD premium!

Check it out:

(Source: https://steemworld.org/@jrcornel )

SBDs are supposed to be pegged to a dollar, and while that peg hasn't exactly been a peg, it has traded pretty close to a dollar for much of its existence.

However, right now the price has broken out to the upside in a major way, currently trading for roughly $5.10.

When this happens it tends to pull the price of the underlying up along with it...

We've seen this play out before...

We saw this happen time and time again with STEEM and SBDs.

When SBDs broke above a dollar, people took their SBDs and they bought STEEM on the internal market with them.

This demand eventually lead to more and more STEEM being purchased off the Exchanges, pulling the price up.

The higher SBDs went and the longer they remained over a dollar, the stronger the the price of STEEM.

I suspect the exact same thing will play out again with STEEM...

As users earn SBDs, they are going to the internal market and selling that SBD for STEEM which is putting constant buying pressure on STEEM.

Given the fairly illiquid markets that STEEM has on the Exchanges, it doesn't take a ton of buying pressure coming in to start moving the prices higher.

While it's not the ideal way to pump STEEM, it's hard to argue the results.

In a perfect world, SBD would remain pegged to $1 and STEEM would fly based on its own merits, however, since we don't live in a perfect world we will take the STEEM price increase any way we can get it.

STEEM going up will bring in more and more users which will ultimately help the network function closer to the way it was intended.

Let me be clear that SBDs being over a dollar isn't the ONLY reason STEEM is strong right now, and probably not even the biggest reason, but I do think as long as SBD remains over a dollar the price of STEM will continue to remain strong.

Stay informed my friends.

-Doc