STEEM Ecosystem Resilience

Weathering the Storm: How STEEM Navigates Market Fluctuations and Emerging Trends

The cryptocurrency world is coined as a hub of progress and fluctuations. Despite the fact that some ventures are eventually devalued in a tough economic environment and after a shift in the tide, others demonstrate exceptional durability. STEEM, a blockchain social media where users can earn their native token (STEEM) belongs to the last group.

STEEM, the ecosystem behind the most popular platform for making posts and blogs (Steemit), has exhibited an extraordinary volatility and adaptability to the ups and downs of the particular market and various trends. Despite the competitiveness in the market, this exchange demonstrated its robustness, attributing it primarily to its unique blockchain-based system that rewards community building and social interactions with cryptocurrency-based rewards. The article reveals a STEEM system that was resilient to market cycles and became adapted to new trends. The on-chain analysis and relative strength studies can be used to make smart decisions for investments.

Source - upload.wikimedia.org

Understanding The STEEM Ecosystem: Rewarding Content Creators

STEEM, reachable in 2016, is supposed to replace social media by applying a reward system for both content creation and curation. Earnings of STEEM tokens happen to users for creation of amazing content and bumping up of valuable posts from others. This reward system contributes to a solidify the community and sustains users' engagement. Contrary to the staunch volatility of the cryptocurrency market, STEEM demonstrated high flexibility and resilience. It attained a zenith in the year 2018 and reached an uppermost price of more than $8, however, after the market forces and internal obstacles it came down. In addition to this, the STEEM network showed unveiled its capabilities during the onslaught of such challenges.

One of the reasons for the robustness of the role is the contribution of its user base in staking. Staking not only secures the network but also help to earn a passive income in which the participants keep getting attracted week by week.

Source - Coinmarketcap

On-Chain Metrics: A Window into the STEEM Ecosystem's Health

Given that the STEEM ecosystem's health goes beyond price charts, it is a must to go further. The on-chain metrics have very useful information as far as the user activity, token distribution and overall network resilience. Here are three key metrics to consider:

Daily Transactions: If the number of daily transactions is low, the vibrancy and loyalty of the user base will be comparatively low. Stable growth annual of operations shows the club has customers who come back and new clients as well. e.g.: - In relation to that, STEEM witnesses a visible and subtle kind of growth as recorded by the outflows of transactions; for instance, the outflows of transactions from March 2022 had the figure of 385,589 transactions while it had the current number of 532,976 transactions in February 2023.

Source - Steemscan

Community Participation: User engagement products usually come with traffic-oriented metrics such as daily active users, content generated and upvoted, which make this product’s efficiency very clear. A decline in these indices would be plausible evidence that the user engagement is decreasing. The STEEM community has produced a lot of engagement in the ecosystem. They are always busy to be acting either by voting, commenting or content creation. e.g.: - The community is characterized by continuous involvement of its people, and this has been reflected in the increase in the number of unique participants from 126,905 in February 2023, the highest number for the year.

Token Distribution: With STEEM distribution being in the hands of numerous users rather than having a handful of them, that ecosystem becomes more decentralized and robust. Contrary to that, an excess of persons among grocery store holders might attract concerns regarding managing and harmony. e.g.: - For now, the distribution of STEEM tokens remains rather stable where the number of long-term holders who possess more tokens than the short-term one’s accounts for a slight increase in the token ownership. During the course, the number of newly minted tokens has increased with a 15.4% of all the new tokens in February this year compared to 9.6% in March last year. Through tracking the on-chain metrics, investors get something deeper into the performance earned by the STEEM ecosystem.

[Reference: as STEEM makes transition to the network, a recent study (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4577054, 2023) found a link between the daily transactions on STEEM and the price of the Steem token. This demonstrates that user activity growth can effect on the surging price.]

Relative Strength Analysis: Identifying Opportunities

Showing a contrast between STEEM's data and other cryptocurrencies via Relative Strength Analysis (RSA) method will reveal some possible way out of the problem. The Relative Strength Analysis (RSA) is a good linguistic analyst for investors for them to find the good opportunity in the changing market conditions. An example of that is how RSA in STEEM can be used by investors in order to see the rate of return growth of STEEM in comparison with the whole market. STEEM‘s RSA is neutral now in March, 2024 with a Fear and Greed index score of 79 (Extreme greed). This, therefore, shows that the stability of STEEM even in the market shocks, means there is an investment option which may be worth investing in.

Case Study: STEEM versus Bitcoin
The hypothetical comparison of STEEM to Bitcoin over 2024 can display some kind of resistance to bear markets or even occasional leadership in recovering markets. Such analysis, in turn, helps investors to position themselves by diversifying or investing in STEEM when a given period is favorable for making these moves.

Source - Tradingview

Case Study: STEEM vs. Hive (HIVE)
Hive is a blockchain social media that came forth as a hard fork of STEEM (a social media blockchain), in 2020. Let's compare their performance using the Relative Strength Index (RSI), with a popular RSA tool :

Source - Tradingview

Scenario: See in early 2024 STEEM's RSI staying above 70 for a prolonged time meaning it is looking overbought while HIVE's RSI being below 30, thus, implies that it is an oversold asset.

This implies, probably, that STEEM is subject to a price correction and HIVE may be cost-sumptuous for buying the asset. Nevertheless, it is important to know this that is RSA is just one tool and should be accompanied by other indicators before going to make any investment decisions.

Protocol Upgrades and Investor Perception

The most important event which has made the greatest impact on STEEM's valuation is the protocol upgrades which still have a considerable impact on the investors' perception. For instance, a triumphant upgrade that presents features like scalability, functionality, and security enhancements could bring new users to the network and spur investor confidence, which will, in turn, lead to an appreciation of the cryptocurrency and so its value. The bad news is that the delay or the engineering problem could also provoke the lack of investor confidence and STEEM's community might be become weaker than others.

Example: STEEM 2.0, the due upgrade that is scheduled to happen in the later months of 2024, shall tackle the governance issues and boost the scalability as well. If effectively implemented, the STEEM 2.0 project would certainly increase its appeal, which presumably would translate into a relative price increase and bring new investors to the platform.

A Comprehensive Perspective: On-Chain and RSA

Blending in-depth on-chain assessment and RSA, investors are empowered with analytical insights into STEEM network's health. Another example is when we find a positive development on the on-chain metric along with a good RSA, this will give us an insight that the system is quite strong, and thus, it will be helpful in making investment decisions. Through the integration of user activity data, token distribution data and further referencing to other cryptocurrencies the investors can form better opinions before entering STEEM market or sale the currency.

Example: Think of a situation like this where STTEEM blockchain metrics show a steady growth in daily transactions alongside user engagement, while RSA clearly demonstrates STEEM trading at discount compared to its own history and other crypto players. This analysis can be summed up that STEEM might be cost-effective. This means that the market has not yet reflected that; however, the market’s low valuation of STEEM is based on good economic fundamentals. Long-term investors may be tempted to consider this as a good moment to enter the market, but it is necessary to take into account the volatility of the digital currency sector. You should keep this in mind that a previous performance is not a guarantee for getting a great yield in the future and that only a comprehensive investment analysis will lead you to the correct decision.

Source - logowik.com

Additional Points to Consider:

1. The idea of novel social media based on distributed ledger technology known as blockchain poses the danger to STEEM. The customer comparison of user movement and features of the platforms becomes significant.
2. Cryptocurrency regulation of the future and its manifestation in the STEEM ecology calls for further observation.
3. The faring of the STEEM's core team concerning its roadmap implementation and managing community growth will become the determinant of the network future.

By continuously being updated of this transformation, investors will be able to traverse the shifting horizon of the STEEM ecosystem swiftly.

The Evolving Landscape: Challenges and Opportunities

While STEEM has demonstrated resilience, the cryptocurrency landscape is constantly evolving, presenting both challenges and opportunities:
Challenge: Competition from New Platforms Surging presence of blockchain-based social media platforms like Steem may turn out to be a major challenge for STEEM. Investors should keep track of user migration and compare particularly the functions of the STEEM platform to its rivalry platforms in order to determine the competitive edge of the STEEM platform.
Opportunity: Innovation and Adaptation STEEM's ability to innovate and to wisely react to changing user demands is sure to be the key for STEEM success through the years. It is of the utmost necessity for the development team to remain in the lead by creating new functionalities that take into account user needs currently and even foresee future tendencies in social media.
Challenge: Regulatory Uncertainty The prospects for the cryptocurrency regulation look murky as well. Regulatory measures taken by the states could turnaround the whole nature of STEEM economy in high degree. Investors need to keep abreast of changes in the law and how their likely consequences will impact STEEM.
Opportunity: Increased Institutional Adoption With regulatory framework regulations getting clearer, institutional investors' entry into the cryptocurrency exchange market can become less difficult. That could cause a growth in the demand for STEEM which in turn might profit of a higher price for it.

Source - upload.wikimedia.org

Investing in STEEM: A Forward-Looking Approach

Investing in STEEM necessitates a detailed examination that equally weighs the existing market environment and how STEEM envisages its future prospects. Here are some key factors to consider:
Team Development: It will be the newly engaged development team with extensive qualifications that will be the guarantor for the future growth of STEEM network. Investors are asked to scrutinize the experience and accomplishments of the team.
Community Growth: A loyal, committed and participating user circle is the key to the growth of a healthy environment. Regularly check performance indicators such as the number of daily active users or user-generated content to know community state.
Roadmap and Vision: A well-balanced strategy that clearly outlines the company’s goals and a captivating vision of the future will be important in creating confidence among investors. The combination of on-chain metrics and relative strength analysis along with prudent evaluation of the above factors will give an investor a holistic perspective of the STEEM and making an intelligible investment decision.

Source - seekvectorlogo.com

Conclusion: A Resilient Ecosystem Poised for Growth or A Bright Future for STEEM?

The STEEM ecosystem has went through a bumpy road with the volatile market and the ever-changing trends. The central strength of this model is that it allows the users to participate in a content creation process, and also helps them to stay engaged with the community. Through on-chain analysis, investors can see the number of daily transactions and token distribution, which are indicators of the STEEM ecosystem’s good health. Besides, this technique allows STEEM's performance to be viewed relative to other cryptocurrencies with the aim of revealing investment opportunities hence making investors to take an informed position.
Through the incorporation of the best innovations available, the ability to adapt to changing market conditions, and finding a way through the difficult regulatory environment, STEEM has all the chances to succeed in the future. The efficiency of the platform depends largely on how its roadmap will be implemented, its capability to recruit and retain a competitive user base as well as its ability to create a positive reputation among the institutional investors. With further development of the cryptocurrency market STEEM's striving for innovations and improvements will be the thing that really makes it a great crypto. On the other hand, the game-changing events such as protocol upgrades can completely alter the investors’ opinion of STEEM and influence its relative power.

[Disclaimer: This article is for informational purposes only and should not be considered as investment advice. Always do your own research and consult with a professional financial advisor before making any investment decisions.]

References:

(1) Steem $STEEM Staking Made Simple: A Beginner's Guide. https://medium.com/@lingsimoli1974/steem-steem-staking-made-simple-a-beginners-guide-b8854ff6ec33.
(2) https://www.investopedia.com/terms/r/rsi.asp
(3) STEEM Price Analysis: Engine in need of a restart. https://bravenewcoin.com/insights/steem-price-analysis-engine-in-need-of-a-restart
(4) Tracking Market Momentum with On-chain Data. https://insights.glassnode.com/the-week-onchain-week-06-2024
(5) https://coinmarketcap.com/
(6) https://www.coingecko.com/
(7) https://steem.com/
(8) https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4577054
(9) Steem (STEEM) Price Prediction 2024, 2025–2030 | CoinCodex. https://coincodex.com/crypto/steem/price-prediction/
(10) STEEMBTC Charts and Quotes — TradingView. https://www.tradingview.com/symbols/STEEMBTC/
(11) Steem (STEEM) Price Prediction 2024 2025 2026 2027 - 2030 - Changelly. https://changelly.com/blog/steem-price-prediction/
(12) Analysis of Witnesses in the Steem Blockchain - Springer. https://link.springer.com/article/10.1007/s11036-021-01749-x
(13) Steem Price Prediction, News, and Analysis (STEEM) - MarketBeat. https://www.marketbeat.com/cryptocurrencies/steem/
(14) An Introduction to On-Chain Fundamental Analysis | Galaxy. https://www.galaxy.com/insights/research/introduction-on-chain-analysis/

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✍ Originally Posted: Steemit.com