• pair _____ dot/usdt
• trade ______ buy
• indicators used ____ Bollinger bands and RSI
• Analysis timeframe ___ 4hrs and 1 day
ABOUT POLKADOT.
Polkadot is network connecting differing tokens or assets of various Blockchain. Just like Solana or cardano Blockchains, it is a web 3.0 network which has the capability of housing smart contracts. The very difference when it comes to polkadot is it's offering of interoperability features among varying chains.
Since it's launch in May 26th 2020, polkadot has been on the news and has currently secured the #13 place in coin market cap ranking. Polkadot network top on the list goals are providing interoperability across other Blockchains, providing stronger security and making the Blockchains more scalable.
Polkadot use cases and benefits
As we may have it, we are practically in a multi-blockchain world. These different Blockchains and there uses sits in isolation of each other. Take for example, Ethereum network are not compatible with Solana networks or another network and vise versa. When a smart contract is deployed on one network, interested users of other networks cannot access the smart contract without being part of the very network to which the smart contract is deployed. In the crypto space we can notice lots of Blockchains and various smart contracts deployed on them. The number can be overwhelming. Polkadot serves as a bridge amidst these varying networks and in the future may become the center point of Blockchain economy. At the same time, polkadot is providing stronger security and equally serves as a form of layer two solution by providing scalability to most networks.
The notable use cases of polkadot includes as below
- Any state machine can be developed on the network like smart contracts, supply chain, payments and more without the worry on the projects consensus mechanism and or it's economic model.
- Coin or token swaps across Blockchains whether public or private.
- Dex can be developed without any central infrastructure.
- Smart contracts can be called from any Blockchain.
- Can communicate with IoT
Polkadot was developed by Gavin wood an earlier pioneers in the crypto space and a co founder of Ethereum network. Other co founders includes Robert Habermeier and Peter Czaban.
Dot coin is the native token of the polkadot ecosystem and the only coin used for all the internal operations of the polkadot network.
Investment in dot token would surely be a profitable investment since polkadot offers wider usability.
dot/usdt Technical analysis.
Following the ongoing dips going on in the crypto space, dot had been on a downward slope. Since it is a usual advice to buy the dips, this period presents investment opportunity for those trading hodl. However a one day analysis of the dot token on 22 - 2 - 2022 shows bullish at 12:35 pm.
From the training I got from my previous lessons on #cryptoacademy, we are asked to build a strategy using two or more indicators. In my strategy, I used bollinger bands, Macd and RSI indicators. My analysis will focus on RSi and bollinger bands.
Indicator setup for binance spot trade and reading.
All the indicators are set to default.
Usually to place a buy trade, we will wait for the dips. Using the bollinger bands, one can easily figure out resistance area at the lower bollinger band.
I followed the analysis in two stages. My chosen timeframe is 4hr timeframe. In other to confirm my signals I had to check the trade in two different timeframe. First I began with a day timeframe.
Dot/usdt 1 day timeframe analysis using Bollinger bands and RSI.
As I observed at the image above, price of dot/usdt has broken the lower Bollinger band signifying a possible buy opportunity. Again, I can notice the reversal emoji candle after the red candle that broke resistance at the lower Bollinger band. At the RSI which serves as my confirmation tool, I can notice that the RSI is below 30% reading signifying oversold. With the two signals, I am ready to buy.
dot/usdt 4hr timeframe analysis.
In the 4hr timeframe, I can observe that a bullish candle has formed after the reversal emoji candle. Now I have further confirmation of bullish sentiment after the dip. Looking at the RSI I can observe that it is still within the oversold area.
From this two confirmations, I decided to place a buy order. See image below.
I bought dot at $16.29 USD. I bought using the "markets" and not the stop limit order that would allow me add stop loss and take profit. This was the error I made on this market. Therefore I took profit earlier applying the finger trap strategy.
Below image shows my sell of dot.
For the purpose of this class, I sold my position at the price of $17.30.
Transaction table.
| Buying price | unit in usd | selling price | profit/loss |
|---|---|---|---|
| 16.29 | 17.26 | 17.30 | $1.01 profit |
CONCLUSION.
Dot coin is among the leading crypto coin in the market. Given polkadot use case, dot can turn out to be a good investment in the near future. Cryptocurrency in general is at a dip, however dot price has fallen low to less than $16 as observed today from the $43 peak last year. However, the dip should rather be seen as an opportunity to make an investment. I recommend dot .