Crypto Academy Week 14 - Homework Post for @pelon53

INTRODUCTION

Bitcoin has been a very attractive asset to investors everywhere. Ethereum and Litecoin are not far behind in the limelight. A lot of people want to get into the crypto markets but these major coins are really expensive.

Still, cryptocurrencies have gone really far that regular individuals have the option of investing. Apart from the divisible nature of coins into satoshis, investors can still buy whole coins that cost really low.

What are Penny Cryptocurrencies

The word penny comes from monetary value that is equal to one cent or cheap. Relating this, we can say that Penny Cryptocurrencies are cryptocurrencies that are really cheap and less than a dollar ($1). Compared to Bitcoin and other pricy Altcoins, Penny cryptocurrencies cost only a few satoshis.

Cryptocurrencies can be classified into Penny cryptocurrencies in certain situations:

1. If they are new or still in the ICO stage: A lot of investors are attracted to new cryptocurrencies because they are generally low in price especially during their ICO stage.

2. If they have a large supply: Most Large supply coins have a value less than a dollar generally because of the fact that they are not very scarce and because of the high market cap value required to boost their price. Examples include coins like Tronix, Btt or even super supply coins like Safemoon, feg and Shiba Inu.

3. If they used to trade high but have crashed: This is the case of a lot of cryptocurrencies these days. I’m 2018, cryptocurrencies crashed so badly. A lot of coins tumbled to really low lows as bitcoin fell from $20k to $3k. For example, steem used to trade at $8 but currently it is at $0.6.

4. If they have been stagnant without any real development: A lot of coins have been in the market for long but they have not seen real growth. When this happens, we can say that these coins are stagnant. This can happen for various reasons like loss of interest by investors, abandonment of project by developers or bad publicity.

Advantages of Penny cryptocurrencies

• They are cheap. This quality is the main feature of the Penny cryptocurrencies making them accessible to regular investors.

• They offer the option of portfolio diversification because many different coins can be bought at a low price.

• Due to the fact that these coins are cheap, investors can own many units of them.

• Penny cryptocurrencies experience high growth rates. Successfully aunching from an ICO to a mainstream crypto really boosts their value. Also, listings on exchanges and sentiments can make these coins see major pumps. This can be taken advantage of especially when an investor owns many units of a good penny coin. A high increase can yield massive gains.

• Successful Penny cryptocurrencies can make its investors wealthy When they are worth more. Let’s remember that Bitcoin was one a Penny cryptocurrency.

Disadvantages of Penny cryptocurrencies

• They are very volatile and can lead to massive losses fast.
• They can be subject to pump and dump scams. These type of scams involve falsely inflating the price of an asset to attract investors.

What will be the best Penny to invest in 2021

This year has seen a lot of cryptos going to new heights. Penny cryptocurrencies have become really sought out for by investors. On the question of best Penny cryptocurrencies, I would choose the miracle coin, Dogecoin.

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Dogecoin

Dogecoin is a really old coin way older than Ether. The coin was launched in 2013 by its developers, Billy Marcus and Jackson Palmer on the dogecoin blockchain.

Just like bitcoin, dogecoin is mined with computers with the proof-of-work consensus. Miners solve mathematical problems in order to validate transactions and record them in the ledger. Miners are rewarded for confirming transactions with dogecoins which they can hodl or sell right away.

The dogecoin was intended to be a cryptocurrency payment system that would be different from other cryptocurrencies. It was was branded as a joke with a popular Shiba Inu meme as its logo and the intentionally misspelled name “doge”. What makes dogecoin special is its lighthearted nature and overall acceptance. What was once created from an internet meme has become very symbolic in the crypto space and many investors’ favorite.

I feel like dogecoin would be the best coin to invest in because it has stood the test of time. Back in 2018 when other coins were tumbling, dogecoin remained unshaken. Taking a look at the sentimental part of its analysis, it is no secret that dogecoin has a strong public backing from powerful people. Popular musicians Gene Simmons and Snoop Dogg have endorsed and encouraged the coin. Even the Mavericks NBA team encouraged purchase of their products with Dogecoin.

Among all the sentiments, the coin owes most of its glory to Tesla CEO Elon Musk. After being unanimously elected as the “Dogecoin CEO” in 2019, Musk replied with a tweet that started the chain of events that led to dogecoin’s blow up.

_Twitter

Even though a lot of people believe that Musk is being deceitful, the effects of his actions are inevitable.

_{Twitter
This type of tweet encourages buying which increases the price}

Looking at the technical part of things, I already mentioned that dogecoin survived the 2018 crash. That isn’t where the wonders end. While other Penny cryptocurrencies are struggling to get back to their all time high. Dogecoin has attained an amazing high of $0.7 just this month.

_{Source Just an upward movement.}

Pros	Cons
It can be mined	It is not capped
Highly supported	The mining is not profitable

Stats of dogecoin as of writing:

Price	$0.3526
All Time High	$0.7376
Rank	#6
Market cap	$46,143,910,244.15
Trading volume	$8,100,067,758.19
Curculating supply	129,707,901,212 DOGE

" ^{coinmarketcap.com}

Do a Ripple (XRP) Analysis

XRP is the native token of the payment protocol Ripple. Ripple is described as gross payment settlement system because it is used to send money across borders quickly and with low costs.

XRP is a top cryptocurrency that has been declining in rank. Before I get into the that, let’s look at the charts for the technical analysis aspect.

Above is a daily chart that shows a head and shoulder type of pattern. After hitting the support at $0.9, it is likely that the price of XRP would go up to at least $1.5 or $1.9. Let’s change the perspective...

The above is a 4 hour chart. We can see that the market is oversold meaning it would likely go up for a while.

Looking at both of the charts show that there is a good buy position for traders but I would NOT invest in XRP right now. My reason for this decision is mainly because of the news and situation surrounding Ripple.

The Securities and Exchange Commission (SEC) sued Ripple back in 2020 and ever since then the two parties have been at each other’s necks. Although Ripple has been victorious most times, the whole situation is bad for business. Back in April, Ripple won a hearing that made the XRP see a major price boost for weeks.

_source

_{The boost}

A lot of people might be optimistic about XRP now because of the wins. But look at it this way, if a single win can take XRP’s value really high then a single flop can send it tumbling to really low lows.

_{Possible drop}

I wouldn’t want to risk that.

Possible investment of 5 penny crypto assets

There are a lot of good chances to buy Penny cryptocurrencies at the moment as most of the market is in the red. Almost $1 trillion has been wiped off the total crypto market cap. Many coins have seen devastating falls that have scared a lot of investors out of the market. Notwithstanding, the market would still correct. The problem now is to know which coins would yield better profits when this correction begins. I’m going to be looking at some coins I would invest in.

Tronix (TRX)

Tronix, or TRX for short, is a coin from the Tron Foundation that was built for rewarding content creators on the Tron network. Tron has been really innovative with TRX and other TRC-20 tokens because of their cheap transaction fees. Tron also made a smart move when they integrated TRX with steemit in 2020. Since then, TRX has seen slow but steady growth.

Above is the monthly chart showing the growth of tron.

Above is a daily chart. From The MACD histogram, we can see that the market is in a big sell zone. This calls for possible retracement. Also from the chart, the candlesticks are in a wave 3 stage according to the Elliott Wave Theory. This means there would likely be a retracement follow a bearish impulse wave before the whole market corrects.

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Dogecoin

I already said that I feel that dogecoin would be major in 2021 and is already on track to greatness. Just like other coins, doge coin has fallen from its high. Still, it is nothing compared to how far the coin has come. Dogecoin holders can be optimistic because of the new tweet from Elon Musk.

_Twitter

This will likely drive more buyers into the market thereby increasing the coin’s value. Let’s look at a chart:

From the daily chart above we can see that the major trend is upward. The recent fall is just a bigger replica of the initial retracement. From this, we can expect a major high in a few days or weeks.

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BitTorrent (BTT)

BitTorrent was founded in 2001 as a p2p file sharing platform to combat the legal hurdles of copyright ownership in the entertainment industry. Tron came along in 2018 and purchased the company intergrating the BTT token in the platform.

BTT has a total supply of 990 billion coins. I’m not particularly bullish about the coin but after its ups and downs, I feel like this would be a great time to purchase some of the coins especially as most of the crypto market is in the reds.

From the chart above we can see that the market is in a downtrend. This might not look like a good time to invest in the market but looking at the repeating support at 0.003, the investment looks like a good gamble.

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Shiba Inu (Shib)

Shiba Inu is a dogecoin is another coin that has been making waves for a while. These days everyone knows about the infamous “dogecoin killer”. It was launched in August 2020 on the Ethereum blockchain.

Thanks to the dogecoin, a lot of people are willing to invest in apparent jokes to give them value. Well, Shiba is one of those seemingly valueless coins that might be worth something in the future. Even binance listed the coin a few weeks right after Huobi boosting its price briefly. Its regarded as the first “shitcoin” on binance.

_Source

Below is the Shiba Inu chart

Yes I would admit it, the coin was one of the worst hits by the dip. But using the RSI tool, we can see that it is hovering around an oversold region. A good sign of a trend reversal.

Also on the fundamental part of things, the Shiba Inu is doing quite well especially with Ethereum cofounder Vitalik Buterin endorsing the whole project. Buterin, who had 50% of the total Shiba Inu supply burned about 90% of his holdings and donated the rest. See news below:

_Source

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Reef

Reef is a DeFi focused cryptocurrency that aims to provide Cross-chain services between centralized and decentralized exchanges. Reed is built on Polkadot and aims to tackle different exchange problems and the high fee problem of Ethereum.

Although less than a year old, Reef is already a force to be reckoned with. With the announcement of Reef Chain Mainnet launch alone, we can expect the price of Reef to shoot up.

_Source

Now let’s look at some charts:

From the chart above, we can see clearly that Reef had a hard fall after it broke a support at $0.036975. Now it has a support at $0.023529. Interested investors should probably wait one more day so that we can be sure if the support would be broken. Otherwise, the coin is a good pick.

A minor observation

I noticed that all the coins touched a major support. Because of this I feel like the whole crypto market is about to correct.

Investment I have made in a Penny cryptocurrency this week

After weighing all aspects of analysis I performed on each coin, I decided that I would go ahead and invest in some dogecoin. For this task, I will be using binance with the following steps

Step 1: I launched the Binance App.

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Step 2: I clicked on search at the top

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Step 3: I searched for doge and chose the DOGE/USDT pair.

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Step 4: I like to have a glimpse of the charts before I buy any coin. I went ahead to click on buy because I already have USDT.

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Step 5: I set the price to Market price and inputed the “Total”. I clicked buy.

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Step 6: Because it is set to the market price. The order is processed and completed immediately.

_{It has been added to my older holdings}

CONCLUSION

Penny cryptocurrencies make up a large percentage of the total cryptocurrency market. Although they allow for a share of digital assets at low prices, investors should be cautious when investing. Cryptocurrencies are still very volatile investments.

Special thanks to @pelon53.