[DOT/USDT] Crypto Academy Trading Competition S6T3 - Homework Post for @pelon53
Hello Everyone...!!!
It is the third week of the Crypto Academy Trading Competition, which enable us to implement the knowledge acquire from various professors’ lesson in our crypto trading. This is a very good initiative as it will boost our confidence in trading and our ability to take risk. For week three of this competition, I have joined team, The Team Investors with professor @pelon53.
Introducing the token for the day
Polkadot (DOT)
Polkadot is an open-source sharded multichain protocol that was designed to provide a foundation for a decentralized internet of blockchains or Web3, which facilitating cross-chain transfer of any data or asset types, connects and secures a network of specialized blockchains, and allowing blockchains to be interoperable with each other.
Polkadot describes a format for a network of layer 1 blockchains known as parachains (parallel chains) as such it known as a layer-0 metaprotocol. Polkadot protocol connect both public and private chains, future technologies, permissionless networks and oracles, given opportunities to these separate blockchains to share information and transactions through the Polkadot Relay Chain.
The native token for Polkadot protocol is DOT, which serve three different purposes on the network; facilitating network governance, staking for operations and security and bonding tokens to connect parachains.
Polkadot is founded by Web3 foundation as a flagship protocol and a mission to interpolate an open-source, user-friendly and fully functional decentralized web. The co-founders for this project are Dr. Gavin Wood, Robert Habermeier and Peter Czaban, with Wood contributing much to the development of the project.
DOT can be traded on many exchange platforms like Binance, gate.io, KuCoin, Bitstamp, Poloniex, Bitstamp, OKX, Binance TR etc.. I will be trading DOT with my Binance exchange account as it is the most popular and reliable exchange with low trading fee.
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Why am I optimistic about this token today, and how long do I think it can rise?
Acala, a parachain project on Polkadot, has launched a $250 million ecosystem fund to boost the adoption of its stablecoin. This brought about a significant rise in the price of DOT.
A team on the pro can customize their own blockchain governance based on evolving conditions and so the network is regarded as highly sophisticated user-driven governance system.
With proper technical analysis we can spot good trading opportunities with DOT as it is a very volatile token.
DOT statistics
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From the screenshot above, we can clearly see that AXS has a Circulating Supply of 987,579,314.96 DOT, Market Cap of $20,363,891,697, ranked #11 and have a price of $20.62 at the time of writing this post.
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Also, on the screenshot above We can see that DOT has attained an all-time high price of $$55.00 which was on Nov 04, 2021 and all time low at $2.69 on Aug 20, 2020. With regards to the current price, DOT has an increment of 668.89% from the all-time low and 62.36% decrement from the all-time high price.
All time price chart of DOT
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DOT is not around the all-time high price and still at the dip with low circulating supply, which means that it has a great potential of growing in future like BTC and ETH. DOT token creates a volatile market for scalpers to spot good trading opportunities in order to make profit.
The team behind the DOT token is a strong project that allow for the creation of DApps, decentralized web. With proper technical analysis we can spot good trading opportunities with DOT as it is a very volatile token.
How to analyze the token?
I will Analyze this coin using the DOT/USDT crypto pair on TradingView. I have applied the Japanese candlestick chart which connect sensitive information like opening and closing price, high and low swing points. I have also added MA crossing strategy and RSI to help identify direction of trend and spot entry position.
First of all, I will be doing a scalping trade and to identify the general trend I have used different timeframes of 30 and 15 minutes.
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The charts above are 30 and 15 minutes AXSUSDT chart. On both charts, we have seen that three lower points are identify and a support trendline is drawn through these points. Price rebounded on the support trendline several times and bounce upwards for bullish trend continuation. The general trend was identified to be bullish by different timeframes.
The trade I chose here is a scalping trade so I have selected 5 minutes time-frame and as well marked resistance and support levels.
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On the chart above, as price was making higher-highs pattern, the MA crossing strategy was employed to identify direction. 20-period MA (blue) crossed above 50-period MA (red) indicating the presents of bullish trend. From the RSI indicator, a confirmation was seen when the lined bridged the mid-mark upwards. I marked my entry point at this region.
To further confirmed signal, I added the Ichimoku cloud indicator to the chart.
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On the same chart above, we saw that Ichimoku cloud was trading below price and formed green color along, given a confluence to RSI and MA crossing for bullish trend and confirming my entry position. I marked a take profit level at $21.61 little above the previous resistance level and stop loss level at $20.45 just below the support trendline.
On my Binance exchange, I open a spot limit order for DOT at $21.12. Afterwards, I placed an OCO order to target my take profit at $21.61. and stop limit at $20.45, of which price takes different direction and my stop loss level was hit. Below are my order details.
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My Plan to Hold DOT long or Sell
I have marked take profit level and stop loss level on the chart above, this is scalp trading and I will exit the market should in case my take profit level is attained or stop loss level is hit. I don't have any intentions of holding on to the coin for long term but in case there is trading opportunities in future, I scalp again to make profit. DOT has a promising future which makes it a good potential investment.
Would I recommend people to Buy DOT
Yes.! I will recommend others to buy DOT. The DOT token has a great project with promising features and an open source for the creation of DApps, oracles and connect public and private chains tokens which is gaining value in the crypto market nowadays. With this, when we hold onto DOT token, we can have a good return in future.
DOT has a low circulating supply which means that it has a great potential of growing in future and this is a good time to enter the market as its still bullish and dip.
With a proper technical analysis traders can find scalping trading opportunities with DOT and make enough profit as the market is still bullish for DOT.
Other Information about the Token
Polkadot network has several social media platforms where we can find the latest news and updates for the project.
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The above screenshot is taken from twitter, from the Polkadot project account about the latest update of the token
To visit the official site of Polkadot click on the link.
CONCLUSION
For the third week of the trading competition, I have selected and traded on DOT/USDT as my fourth trade of the week after carefully making my own analysis about the token.