End of week long STEEM price downtrend
In the last hours price recovered to .002777 on healthy volume.
Now we had a similar upmove last week, but the longer term downtrend overwhelmed it
It has been a one way slide for the last month, so we will need to sustain higher and higher lows to confirm the trend reversal. .004 is a key price point and I have a feeling it will take a few tries to get past it.
With virtually no volumes in the internal market ever since the liquidity awards were suspended, there isnt much force to keep the price of STEEM stable. Let us hope a new improved liquidity awards will return soon. While it isnt possible to set a guaranteed peg, by incentivizing the pegged price, it would be possible to push the prices toward the peg.
With the SBD price highly volatile, it loses a lot of its value proposition, ie, being the stable USD equivalent. And without a stable SBD, the value of STEEM appears to be negatively affected. At least that is what the market is saying
Upvoted, because im fairly certain it will be upvoted behind me by big voters. And who doesnt love curation rewards. These bull market analysis posts seem to have that effect (though this isnt as bullish as one typically sees)
Personally, though, i think .004 is a fantasy any time soon. Id take an even money bet on breaking $1 (about .0017) before .004
FTR looks like i was right
Unfortunately I am leaning this way myself. It is nice to see a little upswing, but I feel we have more of a bear run before people feel it has hit bottom. Hopefully I'm wrong though :)
[Edit] After 5 hours, the upward trend appears to be continuing. Hopefully this keeps up! :)
Over 60 rep you auto get up voted.
Than read after when have more time to enjoy the post. Keep it up never fails me great content.
Great analysis, happy to see someone keeping track.
yes well lets certainly hope so eh?? this site must survive as i think the world will be a much better place under this new regime of rewarded content and sharing of thoughts and ideas free from censorship from the NSA crowd !!
I've been thinking about the SBD peg... More specifically whether the 7 day average (for conversion of SBD to STEEM) should give more weight to the last days in order for the STEEM the user gets for his SBD to be closer to 1$.
Something like
Average of day 1
(+)
Average of day 2
(+)
Average of day 3
(+)
Average of day 4
(+)
Average of day 5
(+)
Average of day 6
(+)
Average of day 7
(+)
Average of day 7 (again)
and then /8 instead of /7 ...it's like the last day has double weight. So you get a more realistic price in STEEM from the SBDs... of course gaming the 7th day market would have a more weighted effect.
Or it can be done in a way where days 4-5-6-7 days have increasingly more weight. That's an alternative to cutting it down to 3 days which would be faster but could be manipulated easier.
the problem with a week long period, or even 3 days is that the trading markets operate on a much faster time scale. So the slippage relative to market price can be literally 50%. And that creates a very real risk factor and that reduces the value of STEEM. I know theoretically it isnt supposed to matter, but what I look at is what actually happened.
We have been in a month long downtrend and the timing roughly correlates to suspension of liquidity awards. And this is during the time of rapid userbase growth.
Maybe it is just a correction from the initial price gains and it is just a coincidence. Or maybe the market values near realtime pegs and SBD has not done a very good job and without SBD to rely on STEEM becomes that much more volatile
In theory a prolonged downtrend should not be ruled out due to inflationary tendencies, and if that happens then the convert function will always lag (due to factoring in more elevated STEEM prices that are gone by the time the conversion takes place) and be unable to get 1 sbd = 1$. I guess they'll have to work something out otherwise it's a problem for SBD that will be considered too volatile and get dumped.
a 5% inflation does not explain a 75% price decline
ok so maybe it has been 10% inflation, but still the price drop shouldnt be many multiples of the inflation rate
It also creates arbitrage opportunity for traders who want to keep exchanging between Poloniex and the internal market.
I didn't realise that the liquidity awards had been suspended completely.
said to be temporary. it would be a very good data point to see what happens to the market price after they come back.
OK.