Hi guys, this is my second operation in the trade competition for week one. I will be handling the BNB token in the course of this trading competition.
The BNB coin is one of the biggest in value of Exchange native coins in use currently. This is a coin issued by the Binance exchange for the purpose of serving as a Utility token. This is an exchange platform that hosts about 1.4m transactions per second. During its initial development, it was launched on the Ethereum network with the ERC-20 standard token but now runs its activity on the Binance Blockchain after migration into its Mainnet.
It is a well-focused project that was developed with the intent of longevity of existence and value. In every quarter, the BNB undergoes Burnwhich is done by using one-fifth of its profits to purchase already BNB in circulation for permanent extinction from its treasury. This is to reduce supply and as well increase demand for its coin. The initial supply into the market is valued at 200m BNB while the current standing of BNB after the April 2022 burn of 1,099,888 BNB (whose worth is about $596 Million) is now 169,432,937BNB. A distribution of 20m of BNB went to its management, 80million to its angel investors, and the remaining 100m to the public.
This utility coin to the Binance exchange (BNB) was initially created for purposes of giving its participants discounted gas fees for a period of consecutive years in diminishing percentage returns. It's now also used in executing transactions fees in the entire Binance Blockchain, bookings and staking, staking, as well as other financial services in the network.
Due to the current standing, if it's Blockchain (Binance Blockchain), the BNB has grown with a Market Cap of over $56 billion with just BTC, USDT, and Eth leading before it. It can be used in some of the payment platforms like Crypto.com, Monetha, HTC; ETHLend of the financial sector as well as for entertainment in virtual cards attainment, lotteries, etc.
The BNB can be traded in the following exchanges namely; Binance exchange, Binance.US, FTX, Huobi Global, Kucoin, Gate.io, etc. As of the time of this post, the BNB has a Market Cap of $61,385,110,415, a Circulation Supply of 165,116,760.89 BNB, and a Price value of $371.77.
Moreso, we can see from the image below that the BNB coin attended its all-time high of $625 sometime in December 2021. And ever since, there has been a gradual decline in price though there have been a series of retests in different points.
Technical/Trading Analysis
I will be applying the Relative Strength Index (RSI) and the EMA indicators. I applied the double EMA lines (both the long and short period settings) to enable achieve a trade signal from the crossover. The RSI is to give confirmation to these signals when they occur.
From the tradingview image, we can see that there was a crossover where the shorter period EMA is observed crossing above the longer period EMA and as well serving as dynamic support to the price trend. We can also see that the RSI Indicator is in concurrence with the price upward movement.
Given the signals I already have, I will be making a BUY position using the Spot trading strategy in Binance.
BUY ORDER
Market Price - $376.9
Investment Amount - 19.97570000USDT
Fee - 0.00003975 BNB
Purchased coin - 0.053 BNB
Stop-loss - $371.1
Take profit - $385.9
This is a BNB/USDT 30mins Time frame chart and hence I should be looking at what profit/loss to get at the end of this time frame. Trade can as well be taken if profitable before the end of the period.
SELL ORDER
Market Price - $379.5
Investment Amount - 0.053 BNB
Fee - 0.00003978 BNB
Purchased coin - 20.11350000 USDT
Stop-loss - $371.1
Take profit - $385.9
From the Buy trade analysis, the initial invested amount used for this project was 19.97570000USDT less trading fee deductions at a market price of $376.9 which purchased 0.053 BNB value. This Buy Set-up was executed in a 30 mins time frame after which trade was initiated and profit is taken.
From the Sell Set-up, the 0.053 BNB purchased was sold when the market price was observed at $379.5 which represents a 0.69% increase over the buy market price. At this time we now have 20.11350000 USDT from selling off the BNB token when the price appreciated by 0.69% over the buy price. This represents 0.1378 USDT profit.
Recommendations
Though they have been drastic price volatility of cryptocurrency sets since 2022 which saw the value of BNB crash from an all-time value of over $600 to about $360, the BNB is hence observed as greater potential for HODL and future investment. There are prospects that this coin would rebound and attain a value relatively higher than what it is currently valued. Given the multiplicity of its use in the cryptocurrency space, the BNB is a known native coin with the capacity to gain more investment in its project.
Thank you professor @kouba01 for this opportunity to present my trade once again.