The Steem Backed Dollar: Is It Time to Buy? [in Trading, Technical Analysis]
Since it's recent peak in early June, Steem has been trading against Bitcoin at a near sixty percent discount.
On the well-known exchange Bittrex, as well as other popular exchanges, one Steem Backed Dollar (SBD, or Steem Dollar) is worth 0.00040 Bitcoin, versus nearly 0.00100 Bitcoin just two months prior.
Technical Analysts widely regard the two-hundred (200) period moving average (MA) as an indicator of the average price of an asset during the past year. Historically, this moving average has been associated with the bullish or bearish trend of an asset - with the asset being regarded as bullish above the moving average, and bearish below it.
Further, the 200MA has been widely regarded as a strong level of support when an asset's price approaches it from above, or resistance when price approaches it from below.
The Steem Dollar is currently trading within ten percent of the 200MA on the Daily Timeframe. Should the price be met with support or pivot upwards with high volume from this point, there is a significant probability the Steem Dollar will have reached a local low.
Another widely accepted price level indicator in technical analysis is the Fibonacci retracement. Technical Analysts widely regard a retracement (a decline or incline in price towards a previous low or high) of an asset's price, to a Fibonacci level, as an important area of support or resistance. These price levels are measured from arbitrary reference points, with significant measurements largely being the most recent lowest low (Pivot Low) to the most recent highest high (Pivot High).
Technical Analysts who follow the Fibonacci retracement price levels widely regard five key price levels as most significant:
- A retracement to 78.6 percent of the Pivot High
- A retracement to 61.8 percent of the Pivot High
- A retracement to 50 percent of the Pivot High
- A retracement to 38.2 percent of the Pivot High
- A retracement to 23.6 percent of the Pivot High
A Daily Chart of the Steem Dollar and Bitcoin cross currently shows a Fibonacci retracement of 38.2 percent from the Pivot Low close to the Pivot High close.
These technical signals often become self-fulfilling prophecies, as trader expectation often influences an influx of buyers into the market at these price levels. Whether this influx increases buying pressure to greater than that of selling pressure determines price movement up or down.
Traders often consider it best to wait for confirmation of increasing buying activity when dealing with small transaction volumes.
This content is for information and illustrative purposes only, and it is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action.
Great analysis - i actually multiplied all of my tools inputs by 3.4 to account for the 24hour trading period and so far some very interesting results.
Thank you, we appreciate your input - hope to hear more from you soon.
As far as steem dollar i think its gonna pop soon if the federal reserve minutes are hawkish tomorrow 2pm est
A good indepth analysis here. SBD looks buyable at present but as you say it could be worth waiting for confirmation beforehand as there may be further to fall. Thanks.
Thank you -- Agreed, in that SBD does look buyable at present. Waiting for confirmation helps when liquidity isn't a concern, as is the case for small investors.
True. Spare funds are tight which is why I'd like to wait for a new trend to begin - I'll be on the lookout for buy signal blogs :)
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yes, it is time to buy.... :)