Crypto Academy Season 3 Week 3 Homework Post for (@allbert) - DCA to create a Portfolio

Professor @allbert talked about the principles and strategies to consider when creating a Portfolio this week. It looks quite interesting and useful.

P

1-Select two Crypto, perform fundamental analysis, and based on your fundamental analysis explain why you chose them. Exclude BTC, ETH, RUNE. Develop and justify your answer. Be original.

In my opinion, the most important thing to consider when investing in a cryptocurrency is fundamental analysis. But often it is technical analysis that determines price increases or decreases.

I chose two cryptocurrencies that are in the top 100. These; Polygon (MATIC) and FTX Token (FTT).

Cryptopras, which are behind in terms of market value, do not attract attention from investors because they are not considered. The choice of cryptocurrencies in the top 100 is usually more advantageous. I will now do a fundamental analysis of them.

Polygon (MATIC) Fundamental Analysis

It is a project that emerged to solve the scalability problem of the Ethereum blockchain. Apart from scalability, it provides the opportunity to develop infrastructure.
It is similar to projects such as Cosmos, Polkadot, Avalance in that it transforms Ethereum into a multi-chain system.

It uses the Plygon proof of stake consensus algorithm. The block generation time on the blockchain is 2 seconds. It draws attention as it has the ability to perform approximately 65,000 transactions per second.

You can get more detailed information about the project by reading Plygon's white paper by visiting https://polygon.technology/.

Using the Coinmarketcap website, I would like to talk about other aspects of Plygon.

The current price of Polygon (MATIC) is $1.04. It ranks 17th in terms of market value. It is on the watch list of 473,913 people. MATIC started to become popular especially from 2021. It is an important detail that so many people are on the watch list.

It has a total market capitalization of around $6 billion. Daily MATIC trading is around 280 million. It is a sufficient volume for the current stagnant market, but the daily volume needs to increase.

MATIC is listed on almost all major exchanges. Major exchanges such as Binance, Coinbase, Huobi, FTX, Bittrex, Poloniex, Kraken, Gemini, Gate, Kucoin, Bithump, Okex, UniSwap list MATIC. The listing of a cryptocurrency on such a large exchange shows that it is a quality and promising project.

When we look at the last 3 months, we see that the number of MATIC addresses is constantly increasing. The increase in the number of addresses indicates that the network is used intensively and that new users are included in the network.

P

Plygon has developers from all over the world. A team that adopts blockchain technology, knows and researches closely.

FTX Token (FTT) Fundamental Analysis

We know that tokens belonging to exchanges are held a lot. The performance of Binance Coin is really great. Huobi Token, Gate Token performed very well. FTX Token is also the token of the FTX exchange.

Although the FTX exchange was founded in 2019, it performed quite impressively. The successful steps of the FTX exchange increased the price of FTX Token.

The team of the FTX exchange is an exchange that solves the problems of many exchanges and makes different innovations. They are one of the most preferred exchanges by users in leveraged transactions.

You can get more detailed information by reading the FTX Token white paper by clicking the link below.
https://docs.google.com/document/d/1u5MOkENoWP8PGcjuoKqRkNP5Gl1LLRB9JvAHwffQ7ec/view

FTX Token current price is $31.88.FTX Token is ranked 34th in the coinmarketcap ranking. It is on the watch list of 63,515 people. This number is very small for a 34th ranked token. FTX token means that a certain segment knows.

Its market value is around $3 billion. Daily volume is $55 million. The daily volume should have been a little higher. The market is sluggish yet what needs to happen is for the volume to be a little higher.

The circulating supply is 94,346,957.52 FTT. Max Supply 339,228,639, Total Supply 345,219,294. The number of FTTs in circulation is low. This rate is 28%.

Although it is an exchange token, it is important that it is listed on many exchanges. It is important that it is listed on major exchanges such as FTX, Binance, Huobi Global, Bitfinex, Probit. Its listing on Binance and Huobi in particular shows that it is an outstanding project.

The number of FTX Token addresses is constantly increasing. When we look at the last 3 months, we can easily see this. Investors are interested. It shows that the network is being used heavily. The team of the FTX token and the FTX exchange seems to have a good grasp of the financial market. He has experience with tech companies like Jane Street, Optiver, Susquehanna, Facebook and Google. They say they have experience in stock derivatives trading.

2- Through your verified Exchange account (screenshot needed), make a real purchase of one of the cryptocurrencies selected in the first assignment and explain the process. The minimum investment must be 5USD (mandatory) and must present screenshots of the verified account and the whole operation.

I analyzed MATIC and FTX Token. MATIC came to the fore in fundamental analysis. While doing the fundamental analysis of the FTX token, I came across some disadvantages. However, the exchange and FTX Token will become more popular as they are pioneers in the industry.

I decided to buy MATIC.
While trading, I give importance to technical analysis besides fundamental analysis. I also reviewed MATIC's technical analysis. It was better than both fundamental and technical analysis compared to FTX Token.

I will use Huobi Global exchange for MATIC purchase. My account on the exchange is verified.

I signed up for the Huobi exchange. I clicked on Balances at the top right. Then I clicked on exchange account.

I typed MATIC in the search field. MATIC is listed in 3 trading pairs. These are MATIC /BTC, MATIC /ETH and MATIC /USDT. Since I have USDT in my account, I will trade with the MATIC /USDT option.

I bought 5 MATICs for $1.026283.

My purchase has been reflected in my account. MATIC value in my account is $5.13

3- Finally, make a simulated exercise, using the DCA method to perform the purchase of two assets and present charts showing the data of days in which the operation was performed, price of purchases, average price, sell point, percentage of profit or loss. (include screenshots)

(tradingview MATIC/USDT chart)

Trading Matic /USDT Using DCA Strategy

I made 8 MATIC/USDT purchases between 14 May 2021 and 8 July 2021.

1. Purchase date price: May 12, 2021 - 1.47 USD
2. Purchase date price: May 18, 2021 - 2.43 USDT
3. Purchase date price: May 24, 2021- 1.06 USDT
4. Purchase date price: May 27, 2021 - 2.20 USDT
5. Purchase date price: June 16, 2021 - 1.62 USDT
6. Purchase date price: June 22, 2021- 1.39 USDT
7. Purchase date price: June 30,2021- 1.17 USDT
8. Purchase date price: July 9, 2021- 1.12 USDT

Let's say I make all purchases with the same unit. So let's say you buy 1 unit of MATIC for every purchase. Let's add up all the purchases and divide by 8 to find the average price.

(1.47+2.43+1.06+2.20+1.62+1.39+.1.17+.1.12) /8 = 12.46/8 = 1.5575

Average price: 1.5575

MATIC current price is $1.02
There is about 50% damage relative to the average price. The DCA strategy is a method I like, but if you buy in the wrong period (bullish period), you will be more likely to make a loss.

Average price is slightly higher than the original purchase price. There is a 40% loss compared to the current price.

However, the 2nd purchase price is well above the average price. The second purchase price is 60% loss compared to the current price.

The DCA strategy is trading at regular intervals, turning the average price in our favor. As I said before, the important thing here is that we should not make our transactions during the bull period in order to make a profit.

Trading FTT /USDT Using DCA Strategy

(tradingview FTT/USDT chart)

This time I made 6 purchases.

1.Purchase date price: May 15, 2021 - 58 USDT
2.Purchase date price: May 19, 2021 - 51.01 USDT
3.Purchase date price: May 25, 2021- 26.92 USDT
4.Purchase date price: June 04, 2021 - 36.59 USDT
5.Purchase date price: June 21, 2021 - 29.85 USDT
6.Purchase date price: July 06, 2021- 25.20 USDT

Average price: (58+51.01+26.92+36.59+29.85+25.20)= 227.57/6= 37.92 USDT

FTT current price: 31.34

The current price of FTT is below the average price. According to the DCA strategy, we are at a loss of 20%. This is because the purchases are made during the bull period. Prices are usually high during the bull period.

The FTT price was $58 when I made the first purchase. According to the current price, there is a loss of around 45%. According to the average price, the loss is around 35%.

According to the DCA strategy, the average price means the price we buy individually.

We lost less because of the DCA strategy. If I had made my purchases during the bear period, I would have been in profit right now.

In order to better benefit from the DCA strategy, we need to make the purchases during the bear period.

Conclusion

Portfolio is very important in trading. With a diversified and intelligently constructed portfolio, a patient trader is unlikely to lose.

In this lesson, I made a basic analysis of MATIC and FTX Token, one of the most popular projects of the last period.

I purchased 5.13 USDT worth of MATIC in my verified Huobi Global exchange account.

I simulated MATIC and FTT Token purchases using the DCA strategy method. I explained the profit and loss ratios.

Cc:
@steemitblog
@allbert