The SBD Elastic band in action - does the SBD Price Lead the Steem Price?

A few months ago I posted about the relationship between Steem and SBD, and how SBD seeems to have a gravitational force, pulling Steem in its direction. The theory was that when the SBD price goes up, the price of Steem follows it shortly after, and when it goes down, Steem also goes down, with a tendancy for the Steem price and SBD price to eventaully meet, resulting in SBD/Steem parity. Is this still holding true with the current big price movements of bot SBD and Steem?

Here it the price data of Steem and SBD from coinmaketcap.com over the past 365 days:

There is a definite lag between the movement of the SBD price and the Steem price. It appears as though the movement of the Steem price will follow the SBD price up or down, and when the SBD price settles Steem eventually meets it at that price.

Now let's look at the last 90 days of activity:

We can see that SBD starts its move first, followed by Steem a while later, and as SBD continues to rise, Steem eventually follows. When SBD starts to come back down, Steem is still on the rise, but the time lag shortens, and Steem starts to drop, not reaching the same high as SBD , until on about 17 January parity is reached at the $4 level. Now SBD rises again, and shortly afterwards Steem also begins to rise toward SBD. Both are currently trading fairly close together in the $6-$7 price region.

There is a close relationship between Steem and SBD. One of the price drivers is that when SBD is far above Steem, Steem is relatively cheap, and people are more inclined to buy Steem an dpower it up. As the SBD/Steem price approaches unity, it becomes a straight swap between SBD and Steem, and Steem is the one that has the power on the platform.

When SBD goes below STeem, Steem becomes more expensive, and so people are more reluctant to buy Steem. They'd rather hold onto their SBD until Steem becomes cheaper. This will drive the Steem price down to parity at that level again.

What about the peg?

My view is that there is a natural tendancy for Steem to move towards to parity with SBD. If SDB moves all the way back towards the 1USD peg mark, Steem will be drawn down towards that level too. The relatively high price of Steem against SBD will be a huge barrier to new accounts growing their STEEM power on the platform, and so the demand for Steem will naturally drop until SBD and Steem are back to parity at whatever USD price that is.

The relationship between Steem and SBD is plain to see here. A high SBD price drives the Steem price up towards it. A drop int SBD will also result in a drop in the Steem price. It is like an invisible elastic band keeping them tethered together.

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