RE: Why is the price of STEEM pumping, and what is the effect?
Source: https://www.tradingview.com/x/o2ObkdpX/
This is a super significant price level for Steem. It's not only trading within a price zone that's had a lot of selling pressure in the recent past (shown by all the candle wicks within the yellow rectangle on the above daily candle chart), but it's also testing the 200 day simple moving average (pink line) for the first time (unless you consider the super long wick of the candle at the far left of the yellow rectangle to be a test, in which case this would be the second test of that moving average).
I don't expect price to be able to stay above the 200 average for long, for two reasons:
1.) as I mentioned, this is only the first test of it after trading below it since...well, forever. Markets tend not to allow price to escape the "momentum" of the long term averages, which brings me to my next point.
2.) the 200 average has a very steep down-slope, which makes this a very low probability point of continued price appreciation (short-term). This type of set-up with the 200 average leads to the average having a "pulling effect" on price, which tends to sling shot it back downwards, as that has been the strong long term momentum of the market (clearly indicated by the long-term average).
Having said that, I see the current price action of Steem as a definite positive and I believe price is indicating a possible pivot into a long-term uptrend (just not "confirmed" yet). I say this for a couple of reasons.
The 200 average test is one obvious indicator of change (of pattern), but, in itself, doesn't say much about chances of changing trend. More positive for me is the fact that both the 50 (red line) and 100 (blue line) moving averages are below price and moving up (in the case of the 50) or flat (100), on top of the recent "ranging market" (price moving mostly sideways) condition of Steem, which has been a real rarity.
Prices tend to range for a while before a change of trend, as strong buyers slowly accumulate from the strong, but slowly dissipating pressure of the sellers, until that selling pressure runs out...then, look out for the rocket shot!
Seems like your analysis was correct, a little drop soon after it but it's bounced of the previous floor.. many range here for a week or two
Yeah, I believe the highest probability scenario is for it to range until the momentum of the 50 SMA "catches up" to price. Things could get interesting if price gets squeezed between it (or the 100 SMA) and the 200 SMA. We could get a bollinger band squeeze type of breakout... either direction, really.
But, like I said in my previous comment, things are looking positive for Steem price for the first time in a Loooooooooong time (relative to technical analysis), so my bet is on UP.