What we can learn from altcoin crash? My trading journal#3: Sprint had a bad day.

Recently, most of altcoins crashed against BTC. One of the victims is Steem. It is close to all time low against BTC at 0.000065. Steem is also close to all time low in ranking at the CoinMarketCap. Recently, Steem has went up as high as 35 rank.

Does it mean that Steem had sudden progress to be ranked 35 and now, there is no developments, therefore, it is rank at right place at 55?

The answer is absolutely no.

It means Steem traders are skittish. Either they don't understand the Steem ecosystem or they are big time speculators. Steem being traded at the low number of exchanges, its volume sucks and more so, it does not attract savvy traders.

The main reason for Steem's relative weakness is that there are big amount of Steem in the market to be sold even in bear market and at low price. These liquid Steem come for sell from mostly STINC and daily earners (who may partially live on the earning).

Therefore, if demand does not keep up, Steem crashes more than other cryptos suchs EOS, IOTA or OMG. These cryptos has fixed supply. Investors who bought them at higher price very unlikely to sell now similar to Steem's long term investors. However, in bear market and during crash, new investors/users hardly enter or buy Steem (or other altcoins). Therefore, there is a relatively high pressure on Steem price and it crashes more than its peers.

Another important fact is that Steem lacks serious marketing. Most the projects at top 50 have big budget, strategic planning and professional marketeers who keep pumping their projects. For example, recent surge in BAT is probably due to a rumor of Facebook interest on BAT spread by some of the BAT executives intentionally or unintentionally. In the world of marketing, most of the campaigns are semi-truth, hype and verbose. However, they works since most the values of a coins are subjective.

One of the example of hypes is Cardano. The founder and former ETH dev, is always active in social media such as Twitter and Youtube. Though the mainnet of Cardano has yet to be released, it is already occupying rank 10.

Now do you think that entrepreneurs or devs will build more and better DApps on Cardano than Steem. Very unlikely. DApp market is very small and Steem has the largest DApps users in the planet. Then why on earth Cardano can snatch all the work that is done in the DApp arena in Steem.

Therefore, Steem's marketing has to be decentralized not solely depending on STINC. It is already getting decentralized due to the efforts from Steem community leaders such as @aggroed, @nathanmars and @oracle-d. However, the decentralized marketing has not yet reached the break even point to bring in enough investors to consume the liquid Steem sold by STINC or daily earners. But we are getting there.

Sprint had a bad day, it went down as low as $5.49 from open price of $5.72 and closed at $5.62. I bought some more to make my average buying price at $5.72. It bounced back from the support line of $5.5 (dark horizontal line). It's RSI was oversold at 28 and it is now well below of 200MA and 50 MA, therefore, I am hoping a bounce back tomorrow or in a week.

The reason for recent weakness is due to a release of public announcement of a small lawsuit against Sprint and a Zack report on probability of earning miss. In fact, Sprint has beaten last 3 earning estimates out of last fours. Also, there is a uncertainty about T-mobile and Sprint mergers. However, if the merger comes out as a success and earning is beaten, then Sprint has very good chance to reach $8.

Again, Steem is trading at a premium, I am planning to buy more Steem with my profit from Stock trading if its value stay long for such a long period of time.

Disclaimer: This opinion is not a financial advice, it my personal perspective and opinion. Please seek professionals for financial decisions.

Image sources: Most images are open sourced (e.g. Pixabay, Wikimedia etc.) with Creative common license. Some images are used with due courtesy to respected owners.

Thanks for reading.
@riseofth
Cryptominer since 2013, occasional trader and tech blogger