Crypto Academy Season 3: Week 5 – Death Cross & Golden Cross – by @yousafharoonkhan

Question no 1: Define Death Cross and Golden Cross in your own words. And what is the significance of DC and GC in trade? And what effect do these two have on the market?

The death cross

A death cross is type of chart pattern that is associated with a potential downtrend. It is a pattern that forms on a price chart of a selected cryptocurrency pair when there is a potential downtrend reversal from an uptrend. It is the point where two moving average crosses each other, the short-term moving average crossing under the long-term moving average. For instance, the death cross is the point where the 10 day moving average crosses under the 50 day moving average. The point where they cross is the death cross. A death cross is not a pleasant sign as it is an indication that there could be a potential downtrend.

The golden cross

A golden cross is a type of chart pattern that is associated with a potential uptrend. It is a pattern that forms on a price chart of a selected cryptocurrency pair when there is a potential uptrend reversal from a downtrend. It is the point where the short-term moving average crossing over the long-term moving average. For instance, the golden cross is the point where the 10 day moving average crosses above the 50 day moving average. A golden cross is a good sign because it is an indication that there could be a potential uptrend.

Significance of death cross and golden cross

Both the death cross and golden cross are trend reversal patterns. The death cross is a bearish reversal signal which means that it signals that there could be a possible reversal to the downtrend. The golden cross on the other hand is the opposite of the death cross as it is a bullish reversal signal which means that there could be a possible reversal to the uptrend. This is useful in trading because it gives traders an indication of a possible trend reversal so as to either enter or exit the market.

Effect of death cross and golden cross

Both the death cross and the golden cross have effect on the market in terms price action. Since the death cross is not a pleasant pattern, whenever it appears, there is always panic in the market as traders are most likely to exit the market. This means that there will most likely be more sellers than buyers which leads to the continuous fall in the price of the asset. The golden cross is a pleasant pattern. Whenever the golden cross appears, there is always alertness in the market as traders are very looking to enter the market. This means that there will most likely be more buyers than sellers which leads to the continuous rise in the price of the asset.

Question no 2: Explain the points given below.
How many days moving average is taken to see Death cross and Golden cross in market for better result and why?
How to see death cross and golden cross on the chart.
Explain Death cross and Golden cross on the chart

Question: How many days moving average is taken to see the death cross

For the death cross, the number of moving average days that is takes to see the death cross is the 50 days and 200 days moving average. This is simply using the combination of a short-term moving and the long-term moving average on the chart. Like I mentioned earlier, the death cross is a pattern that is associated with a downtrend. It forms when the 50 days (short-term) moving average crossed under the 200 days (longer-term) moving average. Why the 50 days (short-term) and 200 days (long-term) moving average is used is that the 50 days moving average takes the average closing prices in the last 50 days and the 200 days moving average takes the average closing prices in the last 200 days.

Question: How many days moving average is taken to see the golden cross

For the golden cross, it is the same. The number of moving average days that is takes to see the golden cross is the 50 days and 200 days moving average. The golden cross is a pattern that is associated with an uptrend. It forms when the 50 days (short-term) moving average crossed above the 200 days (longer-term) moving average. Why the 50 days (short-term) and 200 days (long-term) moving average is used is that the 50 days moving average takes the average closing prices in the last 50 days and the 200 days moving average takes the average closing prices in the last 200 days.

To see death cross

There are three elements that leads to the formation of the death cross. The three elements are lead up phase, **death cross appearing phase, bearish momentum continuation phase

The lead-up phase

This is the phase where there is a fast drop in the price movement at the top of an uptrend. The fast drop in the price at the top of an uptrend is a sign that it could be the end of the uptrend.

The death cross appearing phase

This is the phase where the death cross shows up on the chart. It is at this phase that it becomes clear that there could be a possible reversal to the downtrend because the 50 days moving average is now below the 200 days moving average which is a clear sign of a possible reversal to the downtrend.

Bearish momentum continuation phase

This is the phase that confirms the downtrend. The other phases can be a false alarm but when it reaches this phase it is a confirmation that there is an imminent downtrend.

To see golden cross

There are three elements that leads to the formation of the golden cross. lead up phase, **death cross appearing phase, bullish momentum continuation phase

The lead-up phase

This is the phase where there is a fast rise in the price movement at the bottom of a downtrend. The fast rise in the price at the bottom of a downtrend is a sign that it could be the end of the downtrend.

The golden cross appearing phase

This is the phase where the golden cross shows up on the chart. It is at this phase that it becomes clear that there could be a possible reversal to the uptrend because the 50 days moving average is now above the 200 days moving average which is a clear sign of a possible reversal to the uptrend.

Bullish momentum continuation phase

This is the phase that confirms the uptrend. The other phases can be a false alarm but when it reaches this phase it is a confirmation that there is an imminent uptrend.

Question: Explain Death cross and Golden cross on the chart

Death cross

The death cross appeared on the ENJ/USDT chart. I made use of the 50 period and 200 period moving average to be able to spot the death cross on the chart. On the ENJ/USDT chart, the there was a fast drop in the price of ENJ at the top of the uptrend. This was the lead-up phase. The next phase was the death cross appearing which was a strong signal that there could be a reversal to the downtrend. The next phase was the bearish momentum continuation which was a confirmation that the market was entering a downtrend. It can be confirmed by the lower-highs and lower-lows.

Golden cross

The golden cross also appeared on the ENJ/USDT chart. I also made use of the 50 period and 200 period moving average to be able to spot the golden cross on the chart. On the ENJ/USDT chart, there was a fast rise in the price of ENJ after a period of ranging at the bottom of the downtrend. This was the lead-up phase to the appearance of the golden cross. The next phase was the golden cross appearing which was a strong signal that there could be a reversal to the uptrend. The next phase was the bullish momentum continuation which was a confirmation that the market was entering an uptrend. It can be confirmed by the higher-highs and higher-lows.

Question no 3: Huobi p2p and how to use it ?
How to transfer cryptocurrency to p2p wallet?
How to sell cryptocurrency in local currency via p2p (any country or coin)

Huobi p2p

The huobi exchange is among the most popular and large cryptocurrency exchange that is easy to use and has features that makes buying and selling of any cryptocurrency asset easy. One of the features of the huobi exchange is the p2p where buyers and sellers transact directly with each other through peer-to-peer. The huobi p2p is like a decentralized system where buyers buy directly from sellers in a peer-to-peer way and huobi providing the escrow so as to mitigate risk and fraud. On the huobi p2p, sellers can set their price offers and wait for buyers to accept the offers, or buyers can set their buy offers and wait for sellers to accept their buy offers.

Using the huobi p2p feature is quite easy. After login in, on the houbi interface, click on Buy Crypto located at the top on desktop.

Select the P2P Market option to see all the available buy and sell offers. On the Buy side, you can choose any cryptocurrency you want to buy at the top. There are a number of available cryptocurrencies that can be bought or sold on huobi p2p. The most popular once are BTC, USDT, ETH.

After selecting the cryptocurrency, find the seller or buyer based on your preference and price to buy or sell from. To buy, choose the buy side and choose any seller from the list of available sellers on the huobi p2p.

It is important to note that before buying or selling on huobi p2p, kyc is required to have access to buying or selling on huobi p2p.

Once you find the right seller, click the buy button. Input the amount of coins you want to buy and click on confirm.

To sell, choose the sell side and choose any buyer from the list of available buyers on the huobi p2p. Once you find the right buyer based on your preference and price, click the sell button. Input the amount of coins you want to sell and click on confirm.

How to transfer cryptocurrency to huobi p2p wallet

The huobi p2p uses the funds directly from the exchange account to transfer to the c2c account which means that all the p2p sell offers you create will be sold directly from the supported cryptocurrencies in the c2c account.

To transfer funds to the huobi exchange for use in the huobi p2p, click on balances at the top of the desktop, select exchange account deposit and withdrawal.

On the cryptocurrency section, choose the cryptocurrency to deposit. Deposit the supported p2p cryptocurrencies. I will select UDST to deposit and click on deposit.

Choose the USDT network and click on send deposit address button. Copy the address and deposit the USDT into the exchange account.

After the deposit is complete, the USDT will be used to sell in the p2p.

To transfer the funds into the c2c account, go back to deposits and withdrawals page and click on transfer.

By default, the “from” will be set to exchange account, On the “To” select c2c account. Input the amount to transfer and click on transfer.

How to sell cryptocurrency in local currency via p2p

Huobi exchange makes it an easy process to sell on the p2p service. This service allows any user to sell their cryptocurrency directly to buyers and receive the funds directly in their bank account or other payment methods.

To sell on the huobi p2p, Click on Buy Crypto located at the top on desktop. Select the P2P Market option to see all the available buy and sell offers.

It is important to note that before selling on huobi p2p, kyc is required to have access to buying or selling on huobi p2p.

select any buyers from the available buy offers. Choose any offer that you desire based on your preference

Pay attention to the amount of coins available, buyer limits, price and payment method before choosing any buyer to sell your cryptocurrency to.

Once you find the right buyer , click the sell button. Input the amount of coins you want to sell and click on confirm.

Question no 4: What are the things to keep in mind during P2P trade and describe its four advantages and disadvantages

There are various things to keep in mind when using p2p on huobi.

• One of the things to keep in mind on huobi p2p is the verification of the user. When a user is verified on huobi, there is a gold diamond icon beside the name of the user.

• Completion rate of the buyer or seller is another thing to keep in mind when trading on huobi p2p. It is better to buy or sell to buyers or sellers with high competition rates as they most likely offer less risk or slow transaction.

• Amount of available coins is another thing to keep in mind when buying any cryptocurrency from p2p. look at the amount of available coins before choosing any seller.

• Limits is another thing to keep in mind when buying or selling on huobi p2p. The limits is the range of assets the buyer or seller can afford to buy or sell.

• Price is also to be considered. Every buyer or seller have their own buy or sell offer listed on the p2p. choose the best price based on your preference.

• Payment method is another thing to consider when using p2p. there are various payment methods that are supported on huobi p2p, select the buyer or seller that right payment method for you.

Advantages of p2p

• Quick way to sell crypto and receive payment directly to your bank account.
• It is peer-to-peer which means that buyers or seller have the freedom to set their own prices of their choice.
• Escrow service to mitigate scam or fraud
• It is a fast way to convert crypto to fiat

Disavantages of p2p

• High number of scam attempts on p2p
• Requires verification to use. Verification processes can be slow which means that before you use p2p, you will have to wait to be verified.
• Very few cryptocurrencies are supported on huobi p2p
• Sometimes buyer or seller can delay transactions

Conclusion

A death cross and golden cross are both patterns that can help signal traders when there is a possible trend reversal. A death cross is associated with a downtrend, it is not a pleasant sign as it is an indication that there could be a potential downtrend. A golden cross on the other hand is associated with a uptrend, it is a pleasant sign as it is an indication that there could be a potential uptrend. While the death cross and golden cross does not guarantee 100 accuracy, it has proven to have a good success rate when it comes to determining possible trend reversal. P2p on the huobi exchange is a great feature for buyers and sellers to buy or sell crypto directly to their bank account or payment method of choice. However, it is important to pay attention to the things to consider mentioned earlier so as to successfully use the p2p feature on huobi.

Task post for @yousafharoonkhan