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This is the third day in the second week of the trading competition. I have already joined the team of "fredquantum-kouba01 Traders". Today, I will be giving the full details of the trade I took today, 02/03/2022. The post will show the project background of the token as well as the technical analysis done on the trading view. Then I will also show the screenshot of the margin trade taken on Binance Exchange. So follow me closely.
The name and introduction of the project token, and which exchange it can be traded on, project/team/technical background
Before I move on to technical analysis, i will show a brief details of the project background of the token just as I have been asked. So, we will see team or developers who created the token, the growth and the uses cases of the token. The name of the token is DOGE. And I am going to be trading the pair DOGEUSDT. The analysis will be done on trading view and real trade will be on my Binance Exchange platform.
DOGE is an open source cryptocurrency which was created as means of payment. The token was created by Billy Markus and Jackson Palmer in he year 2013. It was created to be a mean of payment for joke in the world of cryptocurrency and hence it's referred to as the first meme token.
The founders aimed at creating a coin which would reach maximum audience and large broader than Bitcoin and to make the coins distant from controversial history of other coins or tokens. By the time the token was launched, on December 6, 2013, people started visiting the platform of Dogecoin and about a month after the launching, it has gained more followers and visitors as about 1 million people have already known the token.
One of the founders, Palmer was the person that first purchase the domain "dogecoin.com" and at the time he was still working with Adobe Systems at their marketing department. Marcus became his partner in the project when he saw the domain and the little work which palmer has done on it. So, they began working together to develop the Marcus designed the protocol for Dogecoin which was based after the existing tokens, litecoin and luckycoin.
Dogecoin uses proof of work consensus protocol with scrypt technology. A technology which with the mining equipment which I different from that of Bitcoin SHA256. The mining here is too complex because of this scrypt technology the cryptocurrency employed.
Late 2017, Dogecoin experienced a rise in price together with cryptoverse but it fell back in the year 2018. During the Crypto bull run, Dogecoin rises to about 1Billion market capitalization. And in the year 2019, there was a rise in its value again and this was as a result of being listed on a popular exchange platform known as binance and the endorsement by popular man called Elon Musk.
In the year 2021, Dogecoin received many support from popular figure Elon Musk again. As result of this support, many people started investing in the token. And Everything Telsa made a decision to be accepting Dogecoin as a means of payment. That year, 2021, the market capitalization of Dogecoin rose to about 31Billion and it was ranked 10.
According to Coinmarketcap, DOGE is ranked #13 and it's currently trading at $0.1339.
It has market capitalization of $17, 762, 911, 760;
Volume of $864, 869, 853;
Circulating supply of 132.67B DOGE;
Total supply of 132, 670, 764, 300 DOGE
The screenshot below shows these details at the time of writing this post.
Screenshot from Coinmarketcap | SOURCE
Having seen that, let's see the Exchanges DOGE can be traded on.
Exchange It can be Traded on
DOGE can be traded on so many exchanges. And it has been paid with many token. Some of the exchanges it can be traded on are, **Binance, Kucoin, Huobi Global, Kraken, Coinbase Exchange, Bitfnex, etc.
The screenshot below shows some of these Exchanges according to Coinmarketcap.
Screenshot from Coinmarketcap | SOURCE
Why are you optimistic about this token today, and how long do you think it can rise?
I'm optimistic about selling DOGEUSDT today because of the area where the price is. The price is at a very strong resistance level which can send the price back to the downside. Also, the multiple confirmation I see from my analysis and the strategy employed makes me yo be optimistic about going short on the pair.
Technical Analysis of the Token, DOGEUSDT
Here, I am going to be giving the full details of the technical analysis I did on the chart of DOGEUSDT using the trading view platform. The analysis will show the strategy I employed to take the trade. I'm going to be selling DOGEUSDT.
The strategy I will be using to trade DOGEUSDT comprises of price action and three Indicators (RSI, bollinger bands, and Stochastic oscillator). So, I added the indicators to the chart first and began to look for the pair I could trade and to see if there will be confluence to take the trade.
Switching to DOGEUSDT, H4 timeframe, the price is seen on a key resistance level which has rejected price for more than two times. Also,we can see that the price is on a bearish trend but for a short time it has been retracing back and now it's on a resistance level.
In addition, looking at the Stochastic oscillator, we can see that it has entered overbought region and the lines of Stochastic has crossed. The crossing of these lines is a sell signal. See the screenshot below.
Screenshot from Trading View | SOURCE
Zooming in the chart, on the same time frame, H4, I can see that the price is at the upper band of the bollinger band. The upper band acts as a resistance level and it's should resist the price. Also, on the resistance level identified, a reversal candlestick pattern, shooting star has formed. This candlestick is powerful to put the price back to the downside. See the screenshot below.
Screenshot from Trading View | SOURCE
On H1 timeframe, at the extreme peak area, a bearish divergence occurred as the price makes higher highs and lower highs was seen on the line of RSI. Bearish divergence indicates that he buyers are weakened as the volume as reduces in the market. So, it's a signal for a bearish run. See The screenshot below.
Screenshot from Trading View | SOURCE
Upon having confirmation and receiving many signals from the indicators used and price action, I opened a sell entry at $0.1327 and the stop loss was placed above the last high at $0.1386 and take profit at a nearest support level at $0.1267
Screenshot from Trading View | SOURCE
Having gotten that entry and exit price levels, I made a real trade on my Binance App. I used the margin trading option to sell the pair. Below is the screenshot taken at the time I was placing the trade on binance.
Screenshot from My Binance App
Also, the screenshot shows the trade running immediately after the execution. I will keep monitoring the trade and update the result.
Screenshot from My Binance App
Then about 48hrs later,the price hit the take profit. The screenshot below shows this.
Screenshot from My Binance App
Your plan to hold it for a long time or when to sell?
Firstly, let me say that I sold the asset I traded. Then i don't have a plan to hold the trade for long as the analysis is not for long term. Also I did a margin trading which makes me not to be in the possession of the asset. So that means, I can hold the asset in my wallet. Once the trade hits my exit (either take profit or stop loss), I will be out of the market and that would be the end of the trade.
Do you recommend everyone to buy? and the reasons for recommending/not recommending
I didn't buy in my own case, rather I sold. However, If I would recommend anybody to sell the asset, It would be when I sold it. And my recommendation would be because of the analysis I did and many reasons I had to take the trade. I would also give a warning that anybody who wants to sell it then should manage his risk very well because cryptocurrencies are very volatile.
Conclusion
In this third post of the week of the second week of the trading competition I the Crypto Academy, I have been able to give a brief introduction of the project token, the founders, and the growth of the token I traded. Also, I have used the knowledge and experience I have gained to do a detailed technical analysis on trading view platform before I took a real margin trade o my binance exchange app.
Thanks to the Admins for the initiative and thanks to my team leaders this wee, @fredquantum and @kouba01. I will fill the result of each trade on Google form and make a short video of the trades. Thank you all for reading.
Consulted Article 1 Source
Consulted Article 2 Source
Written by @msquaretk