As the daily chart depicts, bullish momentum extended steem's blue sky breakout run above its previous $4 resistance level to nearly $9 on January 3rd. However, bears swooped in and steadily sold it off over the past week. It traded back down to as low as $3.72 on January 11th.
Despite selling pressure that resulted in steem backtesting $4 in recent days, the bulls protected the breakout level fiercely and bears have thus far been unable to achieve a daily close below it.
The directional movement index shows that the bulls and bears are in a tug of war. On the daily time frame, bulls have dominated the price action as +DMI has remained above -DMI since November 2017. The ADX line is not rising, suggesting that the market is in a range bound trading environment for the time being.
Notably, the first week of 2018 has turned out to be the widest ranging in steem's price since its 2016 inception. The cryptocurrency traded as low as $2.67 and as high as $8.78 to start the year, an over $6 range. This suggests to me that large buyers sought to quickly establish positions in the market and were willing to pay whatever premium that was necessary in the short term in order to do so.
Looking ahead, bulls need to continue to hold the $4 breakout level on any sell offs for momentum to be sustained in their favor. If bulls persist in steering price action, a retest of the $8 highs cannot be ruled out.
With the steem blockchain's push to transform online publishing via its Smart Media Tokens protocol, it will certainly be interesting to see how the rest of 2018 plays out for its valuation.