The graph above shows a comparison line chart between DGD (DigixDAO) vs BTC over the last 30 days.
As you can see the correlation between the two is quite significant. It's not a -1 inverse correlation against Bitcoin so it's by no means a perfect hedge against a drop of BTC but good enough to trade on we think.
To test this "theory", we thought lets put on a trade for DGD/BTC when BTCUSD is weak and dropping. So that's what we did this Wednesday:
We've entered DGD/BTC after it clearly broke out of its equilibrium/triangle pattern and was also when BTC/USD broke through a support level.
The drop of Bitcoin last Wednesday wasn't that severe when we've entered the trade cause BTC dropped quite a bit already hours before but with our trade, we've managed to make about 6% in a short amount of time.
DigixDAO or Digix (DGX) is also an interesting project/coin. Digix tokenizes gold on Ethereum. Every DGX = 1 Gram of gold.
You can own, save and transact Gold in tokenized form - keeping secure private ownership of your digital assets. Basically, you can see it as digital gold.
This inverse correlation is much like the inverse relationship between the stock market and the gold price. When the stock market drops (heavily), gold price tends to rise and vice versa.
You can trade DGD/BTC on several exchanges but the mean exchange with by far the most trading volume is on Binance.
So try it out yourself next time when BTC drops again. We think it's one of the best ways to profit from a drop in BTC and "hedge" your Bitcoin position against it without having the option to go short or with margin trading.
Please like and share if you found this informative and helpful. Leave a comment if you have any questions.
And until next time, good luck with your trading!
As you can see the correlation between the two is quite significant. It's not a -1 inverse correlation against Bitcoin so it's by no means a perfect hedge against a drop of BTC but good enough to trade on we think.
To test this "theory", we thought lets put on a trade for DGD/BTC when BTCUSD is weak and dropping. So that's what we did this Wednesday:
We've entered DGD/BTC after it clearly broke out of its equilibrium/triangle pattern and was also when BTC/USD broke through a support level.
The drop of Bitcoin last Wednesday wasn't that severe when we've entered the trade cause BTC dropped quite a bit already hours before but with our trade, we've managed to make about 6% in a short amount of time.
DigixDAO or Digix (DGX) is also an interesting project/coin. Digix tokenizes gold on Ethereum. Every DGX = 1 Gram of gold.
You can own, save and transact Gold in tokenized form - keeping secure private ownership of your digital assets. Basically, you can see it as digital gold.
This inverse correlation is much like the inverse relationship between the stock market and the gold price. When the stock market drops (heavily), gold price tends to rise and vice versa.
You can trade DGD/BTC on several exchanges but the mean exchange with by far the most trading volume is on Binance.
So try it out yourself next time when BTC drops again. We think it's one of the best ways to profit from a drop in BTC and "hedge" your Bitcoin position against it without having the option to go short or with margin trading.
Please like and share if you found this informative and helpful. Leave a comment if you have any questions.
And until next time, good luck with your trading!
