Hello, everyone. I hope everyone is doing well.
I'm delight to be back to the Crypto academy class this season. This time, I'll be writing about @yousafharoonhkan's homework, which he enthralls us with on the topic of Death cross and Golden cross, as well as how to use Binance P2P trade.
Q. Define Death Cross and Golden Cross in your own words. And what is the significance of DC and GC in trade? And what effect do these two have on the market?(in your own words).
Golden Cross
The Golden Cross is an indicator that shows when the short-term moving average crosses above the long-term moving average. As previously stated, the indicator consists of two moving average lines that are used to calculate the average price movement (Short-term and Long-term). The short-term moving average is calculated on a period of 50 days (50MA) while long-term is usually a period of 200 days (200MA).
The golden cross is linked to price movement in a bullish trend, and it provides crucial information about the market trend. When the short-term moving average crosses and stays above the long-term moving average, it suggests a probable trend change.
During a market trend and the golden cross appears, it signifies to the trader that the market trend will shift from bearish to bullish, implying that the price of the asset will rise.
Death Cross
The Golden Cross is an indicator that shows when the long-term moving average crosses above the short-term moving average. As previously stated, the indicator consists of two moving average lines that are used to calculate the average price movement (long-term and short-term). The long-term moving average is calculated on a period of 200 days (200MA) while short-term is usually a period of 50 days (50MA).
Similar to Golden cross, the death cross is also linked to the price movement but in this case it in a bearish trend, this further provide a crucial information about the market trend. When the long-term moving average crosses and stays above the short-term moving average, it suggests a probable trend change.
Death Cross During a market trend and the death cross appears, it signifies that the market trend will shift from bullish to bearish, implying that the price of the asset will fall.
The Significance of Golden cross and Death cross
The golden cross and death cross are critical for traders to notice since they explains the present market scenario in terms of demand and supply, which dictates the price of the asset. The Significance of golden cross and death cross is that they gives trading prospects for traders. For example, when the golden cross appears, traders can believe that the asset's price is likely to rise, indicating a buy signal, likewise if the death cross appears traders can believe the asset's price will fall, indicating a sell signal.
How many days moving average is taken to see Death cross and Golden cross in the market for better result and why?
Two moving averages are needed to see the Golden cross and the death cross. The short-term moving average is set at 50 days and the long-term moving average is at 200 days. As stated earlier, the Golden cross and Death cross setup provides an accurate forecast of price trend. This makes it easier for traders to spot false trends.
The 50 days MA is quicker to react to a movement in an asset's price, while the 200 days MA takes longer. When the short-term 50 days MA crosses above the long-term 200 days MA that means it is a golden cross indicating that the trend will be a bullish trend and can last for some periods of time.
Likewise, when a long-term 200 days MA crosses the short-term 50 days MA that means it is a death cross indicating that the trend will be a bearish trend and can last for some periods of time.
How to see death cross and golden cross on the chart. Explain Death cross and Golden cross on the chart, (screenshot necessary)
I will be using the Tradingview website to set the two moving averages (Short-term (50 days) and Long-term (200 days)) to see the Golden cross and Death cross.
Now the next thing is to set the days of the MAs, it usually come with the default days which is 9.
Now the 50 days MA (short-term) and the 200 days MA (long-term) will be displayed on the chart.
Explain Death cross and Golden cross on the chart?
Death Cross
I will show the Death Cross on BTC/USD chart on Tradingview website
From the chart above, you can see a clear example of a death cross, the death cross appears when the red line which is the 200 days MA (long-term) crosses the green line 50 days MA (short-term).
As I stated earlier, the Death Cross is use to indicate a bearish trend, from the chart above the death cross indicates that the price of BTC will drop, and those trading using the MA indicator will see this as a signal to sell their Bitcoin.
We can clearly confirmed the theory of the death cross that indicates that a price trend will change from bullish to bearish after the 200 MA crossed the 50 MA the price of BTC fell (bearish trend).
Golden Cross
Still using the BTC/USD chart I will show the Golden Cross
From the chart above, you can see a clear example of a Golden Cross, the cross appears when the green line which is the 50 days MA (short-term) crosses the red line 200 days MA (long-term).
As I stated earlier, the golden cross is use to indicate a bearish trend, from the chart above the golden cross indicates that the price of BTC will rise, and the traders that are trading using the MA indicator will see this as a signal to buy more Bitcoin.
We can clearly confirmed the theory of the golden cross that indicates that a price trend will change from bearish to bullish after the 50 MA crossed the 200 MA the price of BTC rise up (bullish trend).
Note that the Golden Cross and Death Cross can sometimes give false signals, as the price trend can move in the opposite direction after the GC or DC appears. For example, if a golden cross appears, signaling a bull trend, the price of the asset can continue to fall, so it's best to use other indicators or trend lines to identify the change in the trend and help differentiate.
What is Binance P2P and how to use it?
Binance is a cryptocurrency exchange that allow users to buy or sell their crypto assets with either cryptocurrency or Fiat (local currency).
The Crypto exchange offers P2P, a platform that allow user to buy or sell their assets directly to their local currencies.
Like I started earlier, Binance exchange serve as the platform where the two users meet (Buyer and Seller) to exchange crypto for local currency or vice-versa, also the exchange also act as the escrow or the arbitrator.
How to use Binance P2P
To use Binance P2P you need to create an account. You can create account with this Link, after creating an account login with your details and verify the captcha.
Step 1 Since I have an account already, so I login with my details
Step 2 On the landing page, then locate Wallet an click on it
Step 3: I proceed and locate P2P and click on it.
There are three features on the P2P which are;
Buy
Sell
Transfer
I will discuss each feature one after another.
Buy: This feature means a user can use his/her local currency to buy any listed asset on the P2P platform
Sell This feature means a user can sell any of the listed assets to local currency on the P2P platform.
Transfer: This means a user can transfer his/her crypto asset to Spot wallet, Cross margin and so on. This can also be done vice-versa.
How to transfer cryptocurrency to p2p wallet?
To use the P2P platform, funds needs to be transferred from Spot wallet to the P2P wallet. I will illustrate how to transfer from Spot wallet to P2P.
Step 1: login to your Binance account, and select wallet.
Step 2: From the wallet section select P2P, click on Transfer from the features displayed.
Step 3 I'm transfering from my Spot wallet to my P2P. there are two things to do here.
Select the asset you want to transfer and enter the amount, on the amount section you can click on Max and this will automatically input all the total quantity of the selected asset.
Step I selected BTC, and inputted 0.003 as the amount I want to transfer and click on Transfer
Note there are no transaction fee imposed on this transaction
Congratulations you have successfully transferred your asset to the P2P platform, you can now sell to your local currency
successfully Transferred my BTC to P2P wallet
How to sell cryptocurrency in local currency via P2P
I will illustrate how to sell cryptocurrency on Binance P2P.
Step 1 Just like the former procedure, login and click on Wallet
Step 2: Click on Sell on the features displayed
Step 3: List of all the Buying Ads will be displayed, the buyer nickname, the price rate, the payment method, the minimum and maximum amount and the percentage score (how much people rate them). So I locate the buyer with the second highest price and highest rating score 91.46%.
Step 4:Enter the quantity of BTC you are selling, select the payment method, in my case am selling all my BTC so I click on All, I selected the payment method which is my account details. I then proceed by clicking Sell
Step 5: Pending Buyer payment, so I waited for the buyer to make the payment.
Time was running out and the buyer hasn't make the payment yet, so I decided to go to the Chat section to message him, but he didn't reply me, so I guess he was busy doing something else. So I waited.
I can no longer wait, so I opt for the next option which is to call him, at the upper side of the screen locate the call icon 📞 and the number of the buyer was displayed. I called him and he picked up, he apologized and said he was doing something else. I told him to make the payment ASAP.
.
Step 6: He made the payment immediately, and I was instructed to confirm the payment. I did that immediately by checking my bank account balance. I click on Confirm receipt
Step 7: I ticked the agreement box, and click on Confirm
The transaction is was successful, I sold my BTC to my local currency (Naira).
What are the things to keep in mind during P2P trade and describe its four advantages and disadvantages.
There are some factors to keep on mind during P2P trade.
Payment Method: to trade your assets on the P2P platform, you need to add atleast one payment method. Incase the user is selling his/her, The buyer will rely on the payment details to send funds.
Terms and conditions: traders on P2P set their terms and conditions, some traders set when to call them, while some set the type of bank they are paying while some will say they are charging fee as bank charges.
Available Cryptocurrency: Not all the cryptocurrency listed on Spot market are available on P2P, The cryptocurrencies available on P2P arr sell USDT, BTC, BUSD, BNB, ETH, and DAI. User can buy any of the listed cryptocurrency with his/her local currency or sell any of the listed assets to his/her local currency.
Limit Either a buyer or a seller, the minimum and maximum amount they can buy or sell will be displayed
Merchant anyone can publish Ads on P2P platform, whether to buy or sell, but the merchant are different has they are completely verified and their credibility percentage, limit and number of trades are usually high than the rest.
Proper Confirmation: This is very important, as a buyer you need to confirm the payment received from the seller before releasing the coin, same goes to a seller, you need to confirm the payment received from the buyer before releasing the coin.
Advantages and Disadvantages of p2p trading
Advantages
- There are different payment method available, and the platform supports a wide range of local currencies. This encourages more active participation in the cryptocurrency community.
There are no trading fee imposed to buy or sell cryptocurrency to local currency.
Since different dealers offer different prices, the platform enables a wider variety of asset pricing. This encourages fair competition for appropriate asset pricing.
- Since different dealers offers different price and no trading fee, user can utilize it in making income, by buying from seller with low price and selling to buyer with high price.
Disadvantages
There are a lot of fraudster, creating fake account to scam people of those hard earn money since the platform.
The buyer are slow in making payment, while the seller sometimes take long before releasing coin, this is really.
There are few Cryptocurrencies available, incase a user wants to sell a Colin that is not listed the user will have to first convert it to the available Cryptocurrency this will incur trading fee since the transaction is done on Spot market.
Conclusion
Golden cross and Death cross are indicators of the asset's next trend, which a trader can use to enter and exit the market. However, because it isn't always accurate and can give false signals, it is recommended to use another indicator to confirm the trend before entering or exiting the market.
Meanwhile, P2P is a fantastic platform that allows users to buy or sell cryptocurrency for local currency and vice-versa. This is really useful because there is no trading fee. Although there are some drawbacks, such as the fact that there are just a few Cryptocurrencies listed on the platform, some fraudsters utilize the platform to defraud newcomers by promising large rates and telling the user to release coin without confirming payment.
The professor have done a wonderful job, I say a big thank you to him
Respected first thank you very much for taking interest in SteemitCryptoAcademy
Season 3 | intermediate course class week 5
thank you very much for taking interest in this class
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