STEEM Price Analysis – December 4, 2016

in #steem5 years ago (edited)

Volume is still low and I would still be concerned about a false breakout at the current price level.

Yesterday I expressed some doubt about whether or not we were witnessing a breakout. The 7-day and 1-month charts appeared to be split on whether it was actually occurring. Today, the price climbed further, but the volume is still relatively low for the spike that we have seen. Let’s go to the charts.

On the 7-day chart, we see that STEEM is essentially trading sideways, even with the price rise over the last 24 hours. Over the last several hours, the price has fallen back to around $0.19. Notice the low volume compared to the last move into the $0.19 - $0.20 range. The volume difference between this “breakout” and the previous high is ~$160,000 vs. ~$430,000 – or just over 1/3 from the previous high.


12-4_steem_7d_range-volume7c1cb.jpg


If we back out to the 1-month chart, we can see the narrowing range and the action in the past 24+ hours. If we had corresponding volume to the previous highs shown on this chart, I wouldn’t be as reluctant to call this a breakout to the upside. This pennant, or wedge, or whatever you want to call it is going to break one way or the other eventually. It’s inevitable. But if I was trying to trade this move (which I would not do), I would wait for more confirmation.


12-4_steem_1m_break74534.jpg


If we take a look at the support and resistance lines, we can see a fairly well established support line in the $0.145 - $0.15 range. This has held several times over the past week and it doesn’t appear that it will break without renewed heavy selling pressure. To the upside, we have resistance right around the $0.20 range, and it might be a little stronger than it looks on the charts.


12-4_steem_1m_support-resist8db83.jpg


That being said, there is a small sell wall on the poloniex depth chart at 0.000276 BTC, which is $0.21. This wall is around 30 BTC, or about $23,000. There is a gradual rise, then another small wall around 0.00035 BTC, or $0.27 – and at this level, the total sell orders would reach ~100+ BTC, or over $76,000.

Buy orders are showing relatively strong support at 0.00021 BTC ($0.16) and 0.0001926 BTC ($0.15). The orders at these levels are ~34 BTC ($25,000+) and ~47 BTC ($36,000+), respectively. The current price is hovering around $0.19.


12-4_steem_poloniexdcec8.jpg


The internal markets aren’t telling us much right now. There’s a $500 sell wall at $0.20, but that won’t really affect the overall market. There’s about a $560 buy wall at $0.175 and some added support around $0.16 with orders totaling between $800 and $900. A drop in the bucket in comparison to the external markets.


12-4_steem_internalfe938.jpg


So, what does all of this mean? Not much, without confirmation on higher volume. As long as this remains low, I would be very careful about calling the recent upswing an actual breakout. We are seeing the buy/sell orders shifting upwards, but the numbers aren’t convincing on either side. A few strong hands weighing in can easily push the market around and bring us back down to the bottom of the recent trading range, which is very possible with the coming hard fork making it easier for large stakeholders to cash out.

Bottom line: Trade at your own risk, but I wouldn’t recommend it right now. If you’re buying for the mid-term, wait for confirmation of a breakout or even a retreat back to recent lows. If you’re looking to sell because you don’t believe in STEEM in the long-term, any time is a good time to exit your position.


Disclaimer: I am not a professional advice giver and this info should not be used for trading. I would be flattered that you think so highly of my fairly basic analysis, but it would not be prudent to use this for trading with real money.

*Charts are from coinmarketcap.com and poloniex and the STEEM internal exchange. Data is current as of 12:40am EST, December 4th, 2016.

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That would make me very happy. Although, $1000 would be better.

at $1000, my current account would be valued 70 million, and steem market cap 250 billion

Sounds like MOON! to me. Isn't that where we're headed?

MOON is toilet, SUN is shower, steem gonna make it rain

If STEEM's gonna make it rain, I need to break out that "dancing" pole.

That would put us at the same level as Facebook. That would be pretty shocking within 6 months.

Agreed on all points well stated

Great minds think alike?

Another great analysis dude, I love seeing these in my feed

Thanks - I appreciate that!

Thanks for sharing your thoughts. I come to the same conclusion.

Hey, that was pretty good analysis.

If you’re buying for the long-term, wait for confirmation of a breakout or even a retreat back to recent lows.

I think if you're buying long term, you should avoid technicals and dollar cost average your investment (ie. buy a small amount defined in $USD each week). In general we're not good at picking tops or bottoms, dollar cost averaging works out well as long as you're betting on the right fundamentals and doesn't put emphasis on the timing.

Ah, yes. That should be "buying for mid-term." Thank you.

We could now be in wave five from the November 17 low.