Crypto Academy / Season 3 / Week 5 - Homework Post for [@yousafharoonkhan]Death cross & Golden cross, How to use Binance P2P trade||

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Greetings professor @yousafharoonkhan thank you for this lesson.I hope to try the homework task.

QUESTION ONE

Death Cross and Golden Cross

Define a Death Cross
A death Cross is an indicator of the moving average price of an asset over a period of time depending on the time frame that the trader wishes to set for his analysis.

There are basically two lines which are used to study and observe the death cross.One of the lines is used for the short term period of 50 days while the other is used for the long term period of 200 days.

The death cross is an indication of a drop or fall in price because the long term moving average (200 MA) have crossed over the short term moving average (50 MA) and stayed above it.

In a nutshell,the death cross indicates that the market is changing from a bull market(upward) to a bear market(downward) although no one can say in absolute how long the bear market indicated by a death cross will stay.

Define a Golden Cross

A Golden Cross is an indicator of the moving average price of an asset over a period of time depending on the time frame that the trader wishes to set for his analysis.

There are basically two lines which are used to study and observe the golden cross.One of the lines is used for the short term period of 50 days while the other is used for the long term period of 200 days.

The golden cross is an indication of a rise in price because the short term moving average (50 MA) have crossed over the long term moving average (200 MA) and stayed above it.

In a nutshell,the golden cross indicates that the market is changing from a bear market(downtrend) to a bull market(uptrend) although no one can say in absolute how long the bull market indicated by a golden cross will stay.

Significance of Death Cross (DC) and Golden Cross(GC) in trade

•Both DC and GC indicate a change in the market trend.DC indicates a downward trend while GC indicates an upward trend.

•Both DC abd GC are vitals tools to an investor as they help an investor to know when to buy and when to sell.DC shows that the market is heading towards a downward trend and so an investor will have to sell off his assets quickly.On the other hand,a GC shows that the market is heading towards an Uptrend and so an investor had to buy more.

•Both also shows that support and resistance levels are always evident.A resistance can happen just after a GC while a support can happen just after a DC.

Effects of Death Cross and Golden Cross on the market
The effect of DC and GC on the market is that it changes the trend of the market from uptrend to downtrend or vice versa.While DC causes a temporary or permanent drop in price,GC causes a temporary or permanent rise in price.Fundamental analysis like price,utility of an asset might still play a role on DC and GC.

QUESTION TWO
For the Death Cross and Golden Cross.The number of moving average(MA) days that is used to get a better result is 50 days for short term and then 200 days for a long term.

The Death Cross is used to indicate that a bearish market is at hand.Although the bear market could last for a short time or a long time.

The Golden Cross is used to indicate that a bullish market is at hand.Although the bull market could last for a short time or a long time.

The 50 days short term moving average is used because it is more realistic and it is usually the start of a support level.The 200 days long term moving average helps to know if the asset is technically strong.

Death Cross and Golden Cross On a Chart
To identify DC and GC on a chart.I used the tradingview.

•Visit tradingview.com

•I am using trade pair of ADA/USDT

•Click on Indicator

•Search and Select Moving Average (MA);Double click it so that the two
lines of MA will show.

•By default,it set at 9 days,so change the first line from 9 to 50(short term) and select any colour of choice.I selected blue colour for my short term.To select colour,click on Style.

Then close it,go back to the second line and change it to 200(short term) and select any colour of choice.I selected red colour for the long term.

•Now I set the short term MA and long term MA to 50 and 200 respectively.

Death Cross from Chart

•A Death Cross is observed when the long term red line (200 MA) crosses the short term blue line (50 MA).From the chart,it happened on 23rd May,2021.
For the death Cross,I selected a time frame of 3 hours.You will notice that the red line(long term MA) has crossed over the blue line(short term MA)and remained above it.This led to a fall in the price of ADA.

Golden Cross from Chart

•A Golden Cross is observed when the short term blue line (50 MA) crosses the long term red line (200 MA).From the chart it happened on 23rd July,2021.
For the golden Cross,I selected a time frame of 1 hour.You will notice that the blue line(short term MA) has crossed over the red line(long term MA)and remained above it.This led to a rise in the price of ADA.

QUESTION THREE

What is Binance P2P and how to use it
Binance is one the most popular cryptocurrency exchange at the moment.It is a centralized exchange that allows users to buy,sell,hold and transfer crypto and fiat with ease.It also has a wallet section whereby dealers can hold their assets.On Binance Exchange,one can buy crypto using fiat from his bank account or buy crypto by sending cash to another user who in turn sends the crypto equivalence of the cash sent.

Binance peer-to-peer (P2P)
Binance P2P is a feature on Binance which acts like a decentralized exchange and so allow users to transfer assets directly from one user to another(person to person) transaction.
Inorder to trade using the Binance P2P,one has to be verified first.Verified dealers will display their account details.For exame if I want to buy BTC,the seller will display his local account detail where I will pay in the money,upon confirmation of the money that I have sent,the seller will release the equivalent BTC held in the Escrew service to me.It is important to note that the crypto is assumed to be held by the Escrew system(a form smart contract) during the transaction to avoid fraud or any form of irregularities.
Binance does not serve as a central authority to P2P transaction,rather the help to facilitate transaction but can only intervene when there is a dispute between the buyer and the seller.
Peer-to-Peer transaction is secure and transparent,it is one of the beauty of decentralization.

How to use Binance P2P
•To use Binance P2P.Login to your Binance App and fill in the login details.You can still log in through the website binance.com

•Look down on the bottom right and click on WALLET.

•Click on P2P from the drop down

•You will a list of assets like USDT,BTC,BUSD,BNB etc.There are lots of options on the P2P section.They include:
•Buy:Here a trader can buy crypto assets with his local currency.

•Sell:Here the trader can his assets and get the money in his local account.

•Transfer:This option allows users to transfer asset via P2P to other wallets.

•Send This feature allows a user to send crypto from his wallet to another user.

How to transfer Cryptocurrency to P2P wallet

•Log in to your Binance Account.

•Click on Wallet and select OVERVIEW.Then select TRANSFER

•Select the asset that you want to transfer and the amount.For example I selected 0.2 USDT and click on TRANSFER

•The USDT has been successfully transferred to p2p wallet.

How to Sell Crypto in Local Currency via P2P

I tried using the method demonstrated by the professor but I could sell my USDT to my local currency,so I had no option that to try this method.

•Log into Binance Account.

•Go to Wallet

•Click on the the middle Icon

•Select asset.I selected USDT

•Select SELL

•Enter the amount of USDT

•Click on CONFIRM

QUESTION FOUR

Things to keep in mind during P2P Trade

•Transact with only verified and trusted dealers to avoid losing your funds.

•Read the terms and conditions of the transaction before you proceed.

•It is important to check the available payment methods to know if you are comfortable with it.

•Make sure to recieve the local currency first before releasing your crypto asset to the buyer.

Advantages of P2P Trading
•It is less expensive.This is because it between person to person.

•It provides a wider transaction options to buyers and sellers.

•The Escrew system helps to improve security and minimize fraud.

•It is a relief to traders in countries where banks were banned from facilitating cryptocurrency transactions example Nigeria.

Disadvantages of P2P Trading

•Fake people can create account and parade themselves as dealers.

•Since the Escrew does not hold the funds,there are risk of one losing his funds during transaction with a fraudulent person.

•An inexperienced user can make a mistake and send the asset to another user.

•Dealers can hype their price due to the volatility of crypto assets.

Conclusion
Death Cross(DC) and Golden Cross(GC) are vital pointers that can help a trader to make informed decision on when to buy and when to sell their assets.A golden cross is a sign that price will go up while a death cross is a sign that price will go down although the effect of DC or GC are sometimes decietful.

P2P trading is likened to a Decentralized method of transaction where a user send funds directly to another user without any intermediary.