It is the third week of the Crypto Academy Trading Competition, which enable us to implement the knowledge acquire from various professors’ lesson in our crypto trading. This is a very good initiative as it will boost our confidence in trading and our ability to take risk. For week three of this competition, I will be joining team The, Team Investors with professor @pelon53.
Introducing the token for the day
Solana is an open source blockchain network that utilizes the proof of history combined with proof of stake consensus mechanism to improve upon the blockchain scalability. Solana blockchain is permissionless and open source that allow for the creation of decentralized applications DApps, Non-Fungible Tokens NFTs and Metaverse tokens. It is the project behind the SOL token.
The proof of history (PoH) mechanism focuses on the bulk process of transactions and has the ability of operating with millions of transactions within a second with only 200 distributed nodes and still determine the time for each transaction. POS of the Solana network is used as a monitoring tool for PoH process as it validates each sequence of blocks produced by the PoH. The combination of these two mechanisms creates a unique phenomenon for the Solana network.
The project was initialized in 2017 by a group of workers from the Qualcomm headed by Anatoly Yakovenko. They formed a team that later created the Solana labs with its headquarters in Geneva, Switzerland. The project and the SOL token were publicly released in 2020.
SOL can be traded on many exchange platforms like Binance, gate.io, KuCoin, Bitstamp, Poloniex, Bitstamp, OKX, Binance TR ect. I will be trading SOL with my Binance exchange account as it is the most popular and reliable exchange with low trading fee.
Why am I optimistic about this token today, and how long do I think it can rise?
An hour ago before a purchase this token, Block tackle web gaming startup raised $5 million in seed funding to develop Solana NFT skateboarding game which eventually start to bullish the token within those hours.
The team behind the SOL token is a strong project that allow for the creation of DApps NFTs and gaming project which is currently gaining more popularity in the crypto market and can lead to an appreciable value in the price of SOL.
With proper technical analysis we can spot good trading opportunities with SOL as it is a very volatile token.
From the screenshot above, we can clearly see that SOL has a Circulating Supply of 320,357,717.97 SOL, Market Cap of $29,823,963,749, ranked #9 and have a price of $93.06 at the time of writing this post.
Also, on the screenshot above We can see that SOL has attained an all-time high price of $260.06 which was on Nov 06, 2021 and all time low at $0.5052 on May 11, 2020. With regards to the current price, SOL has an increment of 18113.41% from the all-time low and 64.62% decrement from the all-time high price.
All time price chart of SOL
SOL is not around the all-time high price and still at the dip with low circulating supply, which means that it has a great potential of growing in future like BTC and ETH. SOL token creates a volatile market for scalpers to spot good trading opportunities in order to make profit.
I am very optimistic about this coin gaining a great value this year since the NFT market is gaining stand in the crypto market and a lot of youth now onto games. SOL will be a great invest for this year.
How to analyze the token?
I will Analyze this coin using the SOL/USDT crypto pair on TradingView. I have applied the Japanese candlestick chart which connect sensitive information like opening and closing price, high and low swing points. I have also added EMA crossing strategy and RSI to help identify direction of trend and spot entry position.
The trade I chose here is a scalping trade so I have selected 5 minutes time-frame and as well marked resistance and support levels.
On the chart above, as price was making higher-highs pattern with price rebounding from the support trendline indicating bullish trend continuation, the MA crossing strategy was employed to identify direction. 20-period EMA (blue) crossed above 50-period EMA (red) indicating the presents of bullish trend. From the RSI indicator, a confirmation was seen when the lined bridged the mid-mark upwards. I marked my entry point at this region.
To further confirmed signal, I added the Ichimoku cloud indicator to the chart.
On the same chart above, we saw that Ichimoku cloud was trading below price and formed green color along, given a confluence to RSI and EMA crossing for bullish trend and confirming my entry position. I marked a take profit level at $92.72 little above the previous resistance level and stop loss level at $90.68 just below the support trendline.
On my Binance exchange, I open a spot limit order for SOL at $91.59. Afterwards, I placed an OCO order to target my take profit at $92.72 and stop limit at $90.68, of which my take profit level was hit. Below are my order details.
My Plan to Hold SOL long or Sell
I have marked take profit level and stop loss level on the chart above, this is scalp trading and I will exit the market should in case my take profit level is attained. I don't have any intentions of holding on to the coin for long term but in case there is trading opportunities in future, I scalp again to make profit. SOL has a promising future which makes it a good potential investment.
Would I recommend people to Buy SOL
The SOL token has a great project with promising features and an open source for the creation of DApps, NFTs and Metaverse tokens which is gaining value in the crypto market nowadays. With this, when we hold onto SOL token, we can have a good return in future.
SOL has a low circulating supply which means that it has a great potential of growing in future and this is a good time to enter the market as its still bullish and dip. I will recommend SOL for long term traders. I am also holding SOL in different exchange wallet.
With a proper technical analysis traders can find scalping trading opportunities with SOL and make enough profit as the market is still bullish for SOL.
Other Information about the Token
Solana network has several social media platforms where we can find the latest news and updates for the project.
The above screenshot is taken from twitter, from the SOL project account about the latest update of the token
Below is also the official website of the Solana blockchain where users can create and add DApps, NFTs and also participate in the network governance.
For the third week of the trading competition, I have selected and traded on SOL/USDT as my first trade of the week after carefully making my own analysis about the token.