It could get really ugly for Steem and SBD as BTC continues to show weakness in the face of Bullish news--> Steem at USD 1.15 (Bias basis) and SBD USD 0.75
Its starting to get very ugly for Bitcoin, I have been looking at the charts and its struggling to gather any momentum. Resistance continues to tick lower from 7765.00 level to currently 6930.00 level. Now we have a new resistance setting in at 6640.00 level putting further downward pressure on the entire market. What is of some worry, the recent announcement of SEC officials stating that Bitcoin and Ethereum are not security did not give the market any lift off, in fact, a mini rally was followed with a smack down.
The implication of Bitcoin and Ethereum trading has huge implication for the entire market. I started to run some calculation for Steem and SBD and things aren't looking good. Even giving Steem a higher bias BTC value, it still barely holds above 1 USD. For SBD a bias BTC value only gives it 0.75 cents. The implication of these data has far reaching consequence for Steem blockchain ecosystem, for starters, it means that it can't afford its debt given its resulting marketcapitalization resulting in further downward pressure as more Steem is printed into circulation and SBD turns off.
Here are some stats if Bitcoin manages to at least hold 5000.00 USD mark and its relation to Steem and SBD
BTC = 5000.00 USD, Steem = 0.00022---> 5000 * 0.00022 = 1.10 USD
Realistically Steem has strong support at 0.00020400, 0.00010300 and 0.00007654
BTC = 5000.00 USD, SBD = 0.00015---> 5000 * 0.00015 = 0.75 USD
Realistically we have already broken strong support, we are looking at new lows, beyond 0.00011 level
The implication of Steem trading price would have huge implication for its marketcapitalization and debt burden. Please note that I gave Steem the benefit of the doubt that it holds up better than SBD but if Steemian start liquidating and panic with the general market it would take it below 200 million marketcapitalization.
How can I play this market given the uncertainty
For the first time, I say, cash is King in these times, not BTC, but having USD means you can take a large portion of the pie for a fraction of the price it would normally cost you. Hopefully large volume sellers (typically Steem sellers with 7K liquid Steem) don't start dumping without bids on the market. In the likelihood that they dump, it would give an advantage if you have 1000 USD of buying up 10K liquid stake, when the market bounces back, you would have nail a sweet profit.
If Bitcoin continues to break further down, well you can do your own calculation to see where you can take a stake. If the large account holders are dumping, probably best to be patient, you would definitely get bargain deal. The longer this last, the better deal as life happens, and folks need to liquidate positions to take care of bills or obligation.