A technical / trading question about the internal market SBD sell wall

A lot of people have traded on the internal market over the last six weeks because the prices of SBD being higher than Steem has been too attractive to turn down. I had never used the internal market until the massive spikes that pushed the SBD:STEEM ratio as high as 1:10. I missed the largest spike but 1:7 was fantastic. I powered up a lot.

But, after some time of STEEM flowing freely like crystal champagne at an A-list rappers wedding, a buy wall went up and slowly moved to crush the ratio backwards. If I remember correctly the buy wall for Steem was 22,000 SBD. A day or two ago, another one went up of an even 15000 SBD.

This seems quite deliberate, especially since there can't be so many people out there who still happen to have 15000 SBD handy after the prices hit 20 dollars US each as at that time, 22K equated to 440K in US dollars or, 160,000 STEEM. I am guessing, many sold and exchanged. And if they bought externally, why would they be selling it underpriced internally?

This moving wall was set to crush prices which is strange since if one had so much SBD, wouldn't they want the prices to go up? Of course, with so much SBD, I am guessing they wouldn't use the internal market anyway. And perhaps this is why it was there and has returned.

Currently, the ratio is 0.67 SBD:1 STEEM but at Bittrex it is 0.65 SBD:1 STEEM. That means that if one was exchanging 100 SBD for Steem, on the internal market they will get 149.254 steem, while at Bittrex they will get 153.847. That is a significant difference. Taking it to market and converting immediately to Steem will get about 3 percent more Steem bang for your buck (well, SBD). Even with the exchange transfer fee of 0.01 STEEM, it is very worth the hassle.

Perhaps the wall is in some way a saviour as it encourages people to go to the exchanges instead to buy their Steem. Those that don't are essentially selling 3 percent below market price.

Which comes to reason two and one of the questions I have. From my understanding, the internal market isn't factored into the STEEM prices on sites like coinmarketcap.com which means even though it is in high demand internally, it does not appear so externally. I do not know for sure but having buying pressure on a coin will drive interest in the coin up whereas low volume will keep it flatter. Does STEEM appear lower volume because of internal market transfers?

If this is engineered of course, it is a risky move if the idea is to get Steem volumes up as the temptation to buy other than Steem at market is high. It could also be a way to encourage this move too of course as the more that give into the temptation and don't power their SBD into STEEM, the less influence they will have on the platform later.

The only way to eat the current buy wall I think is if some whale is willing to sell 24000 Steem under market value and take a 450 STEEM value hit in comparison to selling 24000 on the external markets. I am guessing, there aren't many takers on that. The smaller fish can of course eat into the wall but for them to clear it it is going to take weeks of earnings by people unwilling or unable to go to market for a better price.

This is a long way out of my area and I am unsure if the logic is sound but with that volume of SBD, it can really only be a few accounts that both hold it still, are able to sell it undervalued and benefit from external market trading instead. That would be the exchanges themselves, a few whales that understand that demand will push their overall values up above and beyond the losses incurred by the internal sell or Steemit Inc. Is this some kind of price manipulation?

The thing is, that no matter who it is that is doing it, if Steemit people are smart, they will take their SBD to market and get 3 percent more Steem in exchange for their SBD. This will put increased pressure on Steem and raise the Steem prices to close the gap in the ratio and perhaps, raise more awareness for Steem, one of the most underrated coins on the market. Win/Win... I think.

This could also be nonsense and there may be a much simpler and less conspiracy theory explanation for it but I am wondering what those who understand these things better than I think about the internal marketplace wall. Please go easy on the numbers I have used, they are approximations I calculated in my head.

The comment section is open.

Taraz
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