Edited with imarkup
1.- The name of the token and introduction of the project. Technical background of the project and team in charge of the project. In which Exchange or exchange can be negotiated.
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For today's assignment I traded the BNB/USDT crypto pair. Before I proceed with the technical analysis of the coin I would like to give the fundamental aspect of the analysis together with the important statistics and data available for the coin.
| Factors | Statistics |
|---|---|
| BNB Price | $414.34 |
| Price Change (24h) | $9.40 |
| 24h Low / 24h High | $404.16 /$416.51 |
| Trading Volume (24h) | $1,820,316,948.65 |
| Volume / Market Cap | 0.02663 |
| Market Dominance | 3.43% |
| Market Rank | #4 |
| Market Cap | $68,364,526,688.45 |
| Fully Diluted Market Cap | $68,364,526,319.96 |
Name And Introduction Of Project/Token:-
The Binance cryptocurrency exchange was launched in July 2017 and has gone on to become the largest in terms of daily trading volume globally. The name is in line with the global paradigm Binary Finance short formed to Binance. It is not only the largest cryptocurrency exchange in the whole world but it also has a lot of other important functionalities created for people using it.
Some of such functionalities include the Binance Academy, Binance Chain, Trust Wallet, Binance Smart Chain and other Research Projects that make use of blockchain technology to bring the world of decentralized finance to the present-day users. The BNB token was created as the native token of the exchange and traders would often get a lot of discount on trading fees when they make payment with this native token. Equally, so many sub-projects of the Binance platform make use of the BNB token.
Traded Exchanges:-
The token is native to the Binance cryptocurrency exchange and can be obtained there easily. However, it is also tradable on order cryptocurrency platforms and exchanges which include:-
- FTX
- Gate.io
- KuCoin
- Bithumb
- Huobi Global
- Binance.us
- Poloniex
- Indodax
- Tokocrypto
- FMFW.io
Project Team/Technical Background:-
Binance was founded by Changpeng Zhao who is also its CEO. Zhao was the head of Tradebook Futures Development in Bloomberg and joined Fusion System later as a partner after spending four years with Bloomberg. He has also been very active in the world of cryptocurrency and blockchain technology from 2013 and would later found BijieTech in 2015.
It was co-founded by He Yi who doubles as its chief marketing officer. Mr Yi was also the founder of a fiat-to-crypto exchange called OKCoin in China. She later joined Zhao in 2017 in creating Binance which is now the largest crypto exchange.
Objective Of The Token:-
BNB token was created to function as a native token of the cryptocurrency exchange and can be used to interact with various Binance sub-projects. It can also be used to take care of trading fees on the Binance exchange in which case you receive a lot of discount. Early in 2021 it went through a tremendous increase in price that brought the interest of enterprise investors.
2.- Why are you bullish on this token today?
There are two reasons why I am bullish on the coin especially for today. First deals with the fundamental aspect and the second has to do with the technical aspect. On the fundamental level we should understand that the BNB token is enjoying quite a lot of adoption because traders depend on it to settle trading fees since this gives them discounts. Interestingly, the majority of traders have adopted Binance for trading because of its low fees.
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On the technical aspect looking at the crypto chart you would discover that two EMAs are currently indicating that the price is undergoing a bullish run at present. This bullish run seems to have lasted for quite some time starting from yesterday up to today. So, as far as the uptrend and the EMA has not been broken, I am inclined to remain bullish on the coin.
3.- How to analyze the token for an operation? You must compulsorily use methods and analysis learned in the Crypto Academy.
In order to properly study the crypto chart I combined the Heiken Ashi candlestick chart with two EMAs of different lengths. The two EMAs include a 25 period short-term EMA and a 100 period long-term EMA. The Heiken Ashi would be used to filter out noise in the market and the EMAs would be used to confirm the direction and trend of the market.
Equally, the Heiken Ashi makes it easier for me to understand the trend in the market and likely predict the price movement at least in the short-term. I am able to analyse the chart quite easily since all the candles remain red in a bearish market and green in an upwards market.
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In the BNB/USDT crypto chart above you will discover how the Heiken Ashi is able to determine the overall trend with the formation of successive green candles representing a strong uptrend. Also, the market retracements are shown with red candles that do not have any upper wicks just like the green ones do not have lower wicks. This gives a smoother pictorial presentation of the chart.
Currently, in the market on this one hour time frame a strong bullish candle that does not have any lower wick is being formed. The immediately preceding candle is a Heiken Ashi indecision candle with a small body which comes with both lower and upper wicks indicating that the short-term retracement of the market that had been shown by the red candles was currently reversing, giving way for the continuation of the major trend.
The two EMAs on their own equally confirm the uptrend. The green coloured short-term EMA is acting as a dynamic support for the price and the long-term blue-colored EMA is below both the price and the short-term EMA showing that a strong uptrend was in place. The space created between the short-term EMA with price away from the blue-colored EMA signifies that the uptrend is currently witnessing a lot of volume and strength.
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From the image above you will discover that I have drawn the resistance line on the 3-minute time frame. Currently, this resistance level has been broken by the price which is now equally coming back to retest the level. Once the price begins to make bullish advancements from this retest action I would be taking a buy entry.
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Finally, in the 1 minute time frame you will discover that the price had recovered from the retest action and had begun building up with bullish candlesticks. These bullish candles were sitting on top of the 25 period EMA which was acting as dynamic support. At this point I took my buy entry on the Binance Futures trade platform.
- I took my entry at 414.31
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- I set my stop loss at 412 which is below the swing low of the retest action. I set my take profit at 427 which was the upcoming resistance level
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- The market advanced up to 416.50 and I shifted my stop-loss to around 415.37. The market eventually hit this second stop loss and went further even below my initial entry point.
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- The history of my trade is shown below
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4. Do you want to keep it for a long time? Or when to sell it?
Actually, I would love to store the coin for a long time. However, for the sake of this particular trading contest I am going long on the coin with a futures contract which does not mean actual possession of the BNB token. Consequently, I will only be holding the coin for as long as it remains bullish and would sell or close the position once I get bearish signals.
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From the image above you will discover that I drew an arrow which got to the first level from the point where I entered the position. This first level is actually the first level of anticipated upcoming resistance. If the price fails to break above this first level then I would close the position.
Equally, there is the second level of anticipated resistance. Hopefully the price should be able to break above the second level if it breaks above the first. However, if it fails to break above the second level then a downward reversal is inevitable. This would inform my closing the trade at that level. So, my holding or closing the trade will depend on the interaction of the price at those important levels.
5.- Do you recommend that all people buy it? The reasons for recommending or not recommending it.
The BNB token is a worthy investment from a very considerable ramification. The price of the token had gone through quite incredible increments in the beginning of 2021 in spite of the fact that the rest of the crypto market was not having a great bullish time. However, there are a lot of other reasons why I would recommend buying and holding the token for a long time. Some of these include:-
It can be said to be among the best tokens for utility that can transcend the Binance ecosystem to include use as payment method, travel bills, credit card bills, transfers, etc.
It has a wonderful burndown policy which ensures study growth of the coin by decreasing total supply to increase value and demand
It can be used as a coupon to obtain discounts on trading fees on the Binance cryptocurrency exchange
BNB had gained so much adoption due to the popularity of its native cryptocurrency exchange and had been the third largest coin by market cap before settling for the fourth currently
It is widely used on the Binance smart chain which seems to have the ability to overtake the Ethereum smart chain
6.- Any other important information of the token/project.
It is interesting to note that as much as the BNB token together with its native Binance cryptocurrency exchange enjoys so much adoption we shouldn't forget that there are important things we should know that may actually serve as drawbacks in the near or distant future to the project/token.
Some of these possible drawbacks which I wish to x-ray under this section can include:-
- The Binance Coin functions as a token that is very much centralised meaning that it is immensely controlled by Binance which owns more than 80% of the BNB tokens held in several wallets.
- Due to what could possibly be adjudged envy or jealousy there are lot of regulators across the globe who are doing so much to see if they can squash the coin and render it inaccessible or unusable in their various jurisdictions
- The binance cryptocurrency exchange which is native to the BNB token has become a major target of darknet activities and series of cyber-attacks one of which led to the loss of about 7000 BTC in May 2019.
- The BNB token is witnessing a lot of competition from cryptos that are related to smart contracts. This is majorly due to its successes so far
These and many more constitute some of the reasons why the Binance token, though a good investment, may have to do more in retaining its credibility and usefulness in the face of rising challenges and difficulty. However, it is important that you take note of this and put it into consideration before deciding to make any investment.
CONCLUSION
In today's trading contest I had to trade on the BNB token which is the native cryptocurrency of the Binance exchange. The coin has a lot of interesting fundamental use cases which has seen it enjoy quite tremendous adoption and successes even in the beginning of 2021 that saw its price skyrocketing.
I combined the Heiken Ashi candlestick chart with EMA crossover to determine the state of the market. This was helpful in making me decide on the best place to take my entries. I recorded a great success with today's trading activity and look forward to tomorrow's assignment.