After couple of months of runaway, LEO's price has faced a resistance at 0.3 Steem. Since then it keeps falling. Recently, it was traded for 0.17 Steem. LEO has not seen this low price for three or more months.

What is going on?

Price surge was partly due to the fact that few whales raced to make large stake. The sellers and traders got notice. They start setting up sell walls for profit. Few large holders decided to cash out too at this high price. Few 10Ks of LEO were cashed out by traders and exiting investors. Right now, there are few investors who are racing to make big holding.

Moreover, LEO's surge attracted many traders who bought LEO to sell higher. Since now is a low point in entering investors, their sells stack up and kept unsold. That is why, LEO order book in sell side is much bigger than the buy side. The most sells are from the traders rather than exiting investors.

It is perfectly normal. Abrupt increase in price attracts sellers and decrease attracts buyers. Price of asset swings between the resistance and support.

It is hard to tell the resistance and support for an asset like LEO which is here for only seven months. However, from by buying experience for 7 months, I can intuit about the support and resistance. LEO's resistance is at 0.3 Steem and support is at 0.15 Steem.

Interestingly, LEO is approaching its support zone and may bounce from there.

However, someone who want to be a LEO whale or we call them LION who needs to power up 15K LEO. This weakness in LEO's price can be a great opportunity.

For example, I have almost 124K Leo power (LP), my buying price is still lower than 0.15 Steem since I have earned almost 22K LEO, converted most airdropped tribe tokens to LEO, and lowered my dollar cost average (DCA) of LEO buying during lows.

For example, one can buy 15K with average price of 0.2 Steem for total of 3000 Steem which was unimaginable few months back. On that time, sell side was very thin and it was hard to buy large amount without paying high premiums. It will give 3.55 LEO upvote or equivalent to 0.134 STU (3.55x0.188x0.2) upvote. To earn 0.134 upvote, one will need around 19.2K Steem Power.

Moreover, LEO voting power is much bigger than Steem power.

For example, I have 29.3 LEO voting power for my stake of 124K LP.

At ask price (0.188 Steem), I have equivalent of 23.3K Steem or at bid price (0.17) 21.1K Steem.

At bid price, I have 1.10 STU (124K x 0.188 x 0.2) per upvote voting power. To have 1.10 STU VP in Steemit, I need 125000 Steem Power.

It means that I have similar voting strength as 125K Steem power with 124K Leo Power. It mean that LEO power is 5 times more profitable than Steem Power.

However, there are lots of caveat to this high profitable upvote. LEO is much more volatile. In my buying spree from last 6 months, LEO has swung between 0.08 to 0.32 Steem. Though LEO has went to 0.5 Steem or 2 Steem briefly, those are anomaly.

You have to sell a price between 0.08 to 0.32 Steem.

Moreover, right now there is not enough buy orders to sell for investors like me. I can sell 200-400 LEO per day or I can sell 5K LEO for a day at once.

But I can't do this in very illiquid market. I am basically HODLing for future when LEO will have much more higher trade volumes. Or, LEO will be traded in external exchanges such as Bittrex or Binance with a help of SMT-pegging. SMTs will have same technologies as Steem. It means that the exchanges that has Steem integrated, they can easily add SMTs.

Therefore, LEO is a big gamble for bigger profit. However, to win the game and reduce risk one has to buy at low premium and low price. The current weakness in LEO's price provides such opportunity.

Since I am one of largest holder of LEO and I am preaching for LEO, I would suggest potential investors to do their own research into @steem.leo tribe. The potential growth and developments of LEO relatively better than other top tribes. It can be a subject for another blog.

Disclaimer: This opinion is not a financial advice, it my personal perspective and opinion. Please seek professionals for financial decisions. This opinion is only for educational purpose.

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.
@dtrade
Cryptominer , occasional trader and tech blogger since 2013