Imagine you sold STEEM at $2.77 today, since market is tumbling. BTC dropped from recent high of $10K to $8.2K. Today BTC dropped 6% but STEEM dropped 15%. Recently it was opposite where BTC rose 2% while STEEM rose by 12%. Day and swing traders look for trends. Current trend is that altcoin follows BTC's trend in accelerated ways. Moreover, STEEM price can drop further in downtrend due to some regular sellers.
However, STEEM has already touched $5 hypothetically two weeks back. It reached 0.0005 BTC, then after couple of days BTC reached $10K. All that were coupled with Huobi adoption. A single Huobi adoption put STEEM 80% higher than now.
STEEM is that much volatile: 80% drop for STEEM versus 20% for Bitcoin from the recent peak.
Therefore, regular STEEM sellers is prone to this kind of odd situation where within two weeks they can double their profit or double loss.
Now the question is who are those sellers and buyers. A group of STEEM users sell regularly for daily earning. They may live on it or partially live on. Or, some traders who speculate that price may further drop, sell them to buy cheaper. Risky endeavor at this point though.
Some whales have enough STEEM in staking and they may regularly cash out in spite of price. Some rich bloggers (in terms of STEEM holding) may sell earned STEEM anyways. The bottom line STEEM's demand should be much higher to consume those sells. It can happen in very near future with some big updates such as fast onboarding, hivemind or SMT.
STEEM needs higher growth of its users to sustain high price. It is almost one million member club. But, considering global demand for blockchain based social media, 100 million users would be STEEM's goal for next couple of years. 10M users in a year or two is not a far-fetched expectation.
Now imagine 90% (i.e. 9M new users) or 99% (i.e. 99M new users) future users need STEEM for staking to influence. Where they will get their STEEM. It is from new rewards earned by existing bloggers and sold at the market, or traders who bought low to sell high . Compared to BTC or LTC's emission rate, STEEM's rate is higher, but STEEM's growth potential is higher too.
Currently, due to very slow onboarding and relatively low demand (i.e. less marketing), STEEM price is taking hit as shown by the marketcap (i.e. 32 ranking). Don't get fooled by the marketcap, if STEEM sells pressure were lower it would have much higher marketcap due to its innovations and activities. Interestingly, fast signups, hivemind, SMT, more exchange adoption will increase demand for STEEM. Then it's price will rise at much more faster rate than other altcoins for sure.
If bullish trend regains after the CONSENSUS conference, it may touch at the previous resistance 0.0006. It will be interesting to see if BTC can touch $12K or not. All is possible if the trend stays bullish and sometimes, it is very odd to sell at much more lower price due to occasional and random fluctuation.
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