REPOST - ADA/USDT Buy | S6T2 - Team Trading Post for Team Frontline.

Greetings guys,

Introduction

This week is the week for the crypto trading contest and as a crypto trader and enthusiast I am delighted to be able to take part in this contest and to also join a team. This is my first time joining the contest as I was not able to join last week. For this week I will be joining the Team Frontline which has been formed by professor @abdu.navi03 and professor @shemul21.

1.The name and introduction of the project token, and which exchange can be traded on, project/technical/team background, etc.

The cardano asset is one of the long time assets I have always looked at and I am still optimistic about this project. But for this task I will be performing a short time trade on the asset. Without further I do, let us jump straight into the Cardano project.

Cardano is a blockchain based project which was brought into existence for the sole purpose of transparency and more importantly security. The project was founded in the year 2017. The name Cardano comes from Gerolamo Cardano, an Italian polymath back in the 16th century. Its native token is what we refer to as the ADA. It works based on the consensus proof of stale(POS). The blockchains native token, ADA takes its name from a popular mathematician back in the days called Ada Lovelace.

The POS as we all know it was introduced after the POW to deal with the problems that users encountered with the POW mechanism. The POS mechanism deals with the problem of the POW using more energy and the transaction fees on that mechanism being relatively higher. So in this regard the POS mechanism uses less energy and it also takes less transaction fees as compared with the POW mechanism. Which is why the Cardano blockchain is so successful today.

The cardano blockchain was founded by the Charles Hoskinson. Charles Hoskinson is the CEO of the company IOHK that was responsible for the building of the Cardano blockchain. He is a mathematician and he is also an entrepreneur that deals in technology. Before Charles started the project, he was a trader whose interest was in cryptocurrencies.

The ADA token is a well known asset thus it is traded on well known and trusted cryptocurrency platforms. Such as Binance, Houbi-global, Kraken, coinbase, etc. According to coinmarket cap, it is listed on about 310 exchanges.

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It can be traded in different ways, such as margin trading, spot trading and others.

2. Why am I optimistic about this token today, and how long do I think it can rise

Whilst doing research for my assignment, I realized that the founder of the Cadano project is also the developer of the etherereum blockchain. We have all witnessed the pace at which the native currency ether has grown over the past months thus if there were any doubts I think it has been cleared.

The use of the Proof-of-stake consensus algorithm has again made it only one of the few blockchains to run to, considering the fact that it consumes less energy, as compared to the Proof-of-work algorithm.

Now let us take a few statistics about the token.

The current price of the cardano token is 0.9303 according to coin market cap. It is currently ranked at number 8 according to market cap on coin market. It has a circulating supply of 33.66B ADA according to coin market. A volume of 1,725,313,771

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Before we invest in a token I believe we need to look at the current state or price of the token and then also look at its all time high to decide if it is good to invest in it.

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The all time high of the cardano token is $3.10 around September 2 2021, a figure which it will try its possible best to break in no time. As we have learned that it will try to get back to the price at which it was resisted.

The cardano token is currently below one dollar and we can refer to it as a penny crypto but I think it will be wrong to call it a shitcoin since it has proved time and time again that it can perform and reach greater height by beating the 1 dollar mark. About a few months ago it was at 2 dollars until the bearish face of the market started and it has since struggled to beat that 2 dollar mark.

When the bearish phase of the market start again I believe the ADA token will be one of the best gainers as it will break its all time high looking to reward its holders. Looking at its market capitalization and the team behind the project I wouldn't be surprised to see the token behave like the ethereum token.

3. How to analyze the token?

I have perfumed my fundamental analysis and I believe that it is a great project to invest in. Now the only thing I have to do is confirm my speculations and use technical indicators to perform my reading.

I will use the trading view site to make my readings on a chart. I will use the Japanese candle stick chart and then I will add a few indicators that will help in taking my TP, SL, and entry points on the chart before I do my real trade on an exchange.

For my readings on the chart I will use the support and resistance lines.

I will also be using the RSI and 200 EMA indicators on the chart.

The RSI is a technical indicator that allows the trader to determine the strength of the market. When using the RSI tool we should know that it provides traders with overbought and oversold signals which stand for different trends in the market. When the price of an asset is in an overbought zone it means that the asset in question is might go down soon, this can be identified by the trader when he sees the RSI line above the 70 mark.

When the price of an asset is in an oversold region it means the price of the asset might go up soon. This can be seen with the RSI below the 30 mark. Thus meaning that the asset is undervalued.

The EMA is a technical indicator which is used in determining the price of an asset over a time frame. Since I wont be opening my positions for a long time I decided to go for the 200 EMA so that I can locate the trading opportunities on the chart faster and to also use shorter time frames.

The EMA works by taking the price of the asset on the chart into consideration If the price of the asset is above the indicator the market is in a bullish phase but if the price is below the indicator it means the market is in a bearish phase.

Trading view

Looking at the chart above I can confirm that the asset has made some gains during the day.

Upon adding the 2 indicators to my chart, the RSI line is above the 50 which shows that the asset is nearing an overbought region. This shows that the asset might reverse soon but for now it is still bullish.

The 200 EMA line further confirms my position when the price of the asset is above the EMA line.
As we can see from my entry after a minor resistance the asset is beginning is rise up again as we can see the emergence of a green candle stick. All we have to wait for is to see another green candle stick to confirm.

After placing my spot trade as seen in the screenshots below, I will wait for when my take profits level reaches before I leave the market.

image from houbi-pro app

My Plan to hold it for a long time or When to Sell?

For this asset I do not plan to open my position for a long time considering the market structure currently. As we can see the market is having a temporal bullish cycle and I will only stay in it for a short while until I gain profits and the market start to reverse. Am nit downplaying the success of the ADA asset but for now the resistance is at one dollar and it is able to reach the one dollar mark in the shortest time I will exit trade.

Recommendation for everyone to buy this token

As I explained in the beginning, the cardano project is a good one but we must have a plan before taking a decision for entering the market. If a trader wants to buy the token for a long time the best will be to consider buying now and then decide on when to take profits. But whist holding the asset, what ever happens you must hold. I recommend a long term buy of up to 5 years as we will see its full potential at that time. A short buy should still give profits as the asset is making bullish runs.

The ADA token as compared to other coins is less volatile, don't get me wrong here when I say this. All I am saying is that as compared to the btc, xrp and other popular projects the ada is less volatile and a trader investing on it will hardly make huge losses.

Conclusion

I've always remained optimistic about the cardano project which is why for my first trade of the week I have opted for the ADA asset. A project that has been founded by an important member of the ethereum project only points towards one direction, and that direction is success.

After making fundamental and technical analysis I have taken my positions carefully but when it gets to the time of taking my profits, sentiments might end up playing a big role in my decisions forcing me to hold for a longer time.

Thank you.