STEEM/BTC Testing 50 Day Moving Average for the First Time on Poloniex (log chart image)

The probable outcome of this test (the red line that price briefly spiked above today is the 50 day simple moving average) is a day or two of declining prices, at the very least. This is the expected reaction after such a long down-trend. A declining moving average is always a favorite target for profit taking, especially longer moving averages like the 50 day and 100 day (the blue line on the chart).

As an example, we can see at each of the red arrows points where price tested the 20 day moving average (orange line) and failed to close higher, going on to make a series of lower highs and lower lows (a continued downtrend). We also have the more recent tests, marked by purple arrows, that indicate moments when the moving average was breached (price closed above it), yet price was "sucked down" by the declining moving average within days of closing above it. This is also a typical price reaction. Moving averages tend to have a "magnetic effect" on price and steeply declining moving averages and/or moving averages that have been moving in the same direction for a long period of time (in this case, downward) generally have a lot of "momentum" behind them. That's to say, it will usually take a few price breaches of a long declining moving average before the momentum of price will change for good (causing the moving average to slowly curl up).

The 20 day moving average has finally flattened (a positive indicator of bullishness after a downtrend). However, the 50 day simple moving average (SMA) is still in steep decline with what I expect to be quite a bit of momentum (people have lost a lot of money trading STEEM, after all). In other words, I don't expect price to go up much more from here, before we start to experience the downward momentum of this "dynamic resistance" that is the 50 SMA.

That's not to say that STEEM's price hasn't bottomed yet, only that it's likely we'll at least see some minor price corrections (to the downside) from here, before any upward continuation will happen. It's not unreasonable to expect a few failed attempts at breaching the 50 SMA, before it finally busts up for good.

On a positive note, the 20 day "bollinger bands" (thick black bands surrounding the price), which indicates the two standard deviation range of the 20 SMA, are narrower than they've ever been, forming a "pinch" just one day ago, and we broke to the upside out of that "bollinger band squeeze". This is a positive indicator of high upside potential. The tightening bands indicate a period of relatively low volatility, this could be an indicator of dwindling momentum from the previous trend. Breaking up, outside of these squeezing bands is often a sign that the overall market sentiment has shifted from negative (bearish) to positive (bullish).

This could very well be the start of a big up-trending move.