Hi folks hope you are well and welcome to the new update on Steem with US dollar pair. To understand the current downtrend we need to go back in November 2019. When the price action was move sideways and took a powerful in January 2020 and broke out the 100 resistance. After breaking out the 100 the price line of Steem used this resistance as support and took another very powerful and touched the 200 resistance.
At this level the price action has hit 4 times but failed to break out the 200 resistance. And price action again dropped at 100 on 26 Feb and again used this moving average as support to make another attempt to break out the 200 . But this time the price action could not even able to move closer to 200 resistance and dropped down again. And currently the Steem is likely to break down the previous support of 100 simple moving averages well.
Formation of pattern:
During this move on the price action of Steem formed a . A on 27th Feb 2020 I posted an article where I revealed that the Steem has formed a pattern on one day chart. The formation of this pattern was started on 10th of January 2020 and the price action entered in the potential reversal zone on 27th Feb 2020 this was the day when I posted the article. We also had a very strong support of 200 in the PRZ level of this that made this pattern more stronger. Because the 200 on one day chart is always considered a strong support and it can also provide sufficient push to priceline for the .
And as per and Fibonacci sequence method the price action was suppose to take the from this potential reversal zone and enter in the area of A to D leg of this pattern between 0.382 to 0.786 level.
On the very next day 28th Feb 2020 the price action moved up and produced more than 28% profit and it was expected that if the price action will cross up the 0.786 level then it can move more up using the 0.786 level as support and Steem will finally breakout the 200 resistance of 2 day chart as well. Even though the trade plan I posted in article executed successfully. But unfortunately the price action dropped down again after visiting the area of A to D leg of pattern.
A head and should pattern can lead the priceline more down:
If we see the broader view then it can be clearly examined that Head and Shoulder pattern is completely formed that is reflected upto 4 days chart.
At this time it can be clearly seen that the price line of steam has hit the spike even beyond the neckline of Head and Shoulder pattern
At this time it can also be observed that a long red colored strong is putting pressure on the neckline of the Head & Shoulder pattern to break down the neckline as well. And due to this pressure the price action can easily break down the 100 support on 2 day chart.
Bullish pattern a reversal signal is appeared:
Now I am taking you to the more broader view of Steem’s price action and that is the price action has completed the formation of another on weekly chart. And this time the pattern is big . Now let's have a look how perfect this is pattern is formed. The initial leg was started by the which was opened on 25th November 2019 and this like has been completed on the which was opened on 25 Nov 2019 and completed by the candle stick of 13 January 2020. Then the price action dropped upto 0.618 Fibonacci level. From this point the priceline of Steem was supposed to be projected between 1.13 to 1.618 Fibonacci level this was the projection of A to B leg. And we can see that the price action even projected little bit more than that level. Therefore at this moment I have ignored some extra spike cause all other legs are formed as per requirement of pattern. The final leg was supposed to be retraced between 0.886 upto 1.13 Fibonacci level. And it can be easily seen that the price action has retraced up to this level. At this time the price action is moving in the potential reversal zone of this big pattern.
The potential reversal zone and the area ranges:
Now from this potential reversal zone the price action should take a to enter in the area of C to D leg. And as per pattern the potential reversal zone starts from $ 0.1128 and ends at $ 0.0803 and the areas starts from $ 0.1573 and ends at $ 0.2390. So there is an expected big move upto 197%. But this potential reversal zone should be as a stop loss as well because once the PRZ level will be broken down then Steem can turn more .