Introduction to Theta
Market Meditations | May 25, 2021
⏯️Put simply, Theta is a blockchain based peer-to-peer network that decentralizes video streaming. Theta believes that the current process for streaming videos is highly inefficient:
- Today, content creators have to work with intermediaries like YouTube or Twitch to share work, often leading to rebuffering, higher load times, or poor quality when systems are congested.
- The nature of centralised middlemen also means less income for streamers as everyone including the middlemen takes a cut of the profit.
- Theta leverages the blockchain to solve for such inefficiencies ?
Theta enables independent network users to pool resources that content creators currently rely on intermediaries for. The blockchain rewards users who supply a resource like bandwidth, for example, with the THETA token. Additionally, by decentralising the network the stream quality improves rebuffering, and load times are reduced since creators are no longer at the mercy of the centralised infrastructure. Finally, content creators are rewarded for their work directly with THETA token and with no middleman their profits increase.
Many have cited the launch of its mainnet as the reason for THETA’s parabolic price rally whilst others have pointed out that the price truly began its aggressive ascent once the P2P streaming service was successfully tested. Regardless, the coin is on the radar of many traders and there’s a few things all THETA traders should take note of ?
1️⃣Over 55% of all coins have already been staked and this number is on the rise. Staking tokens requires you to lock-up your coins for a fixed period of time, which means that anyone who has staked tokens has no intention of selling their coins in the near future. This reduces the selling pressure drastically and is bullish for THETA as long as demand is present ?
2️⃣According to Wu Blockchain, 61% of THETA tokens are owned by the top 10% of network users. In other words, a large supply is owned by a select few. This dynamic enables the few individuals with the majority supply to manipulate the market ?
Therefore, if you’re planning to trade THETA, you could consider the following:
✅ Wait for a HTF candle to close before taking an entry. It’s common that when a few individuals manipulate the market, they briefly push the price past a resistance level for a few hours to encourage other participants to pile on longs, then they push the price back down trapping liquidity above. ? Being patient with your entries can pay off.
✅ Decrease your position size. In a manipulated mark, long wicks to the downside and upside are common. This is because whales looking to fill large buy orders, for example, need the liquidity from your stop loss or open short position. By decreasing your average position size, it allows you to ride a position with a relatively loose stop whilst still maintaining a healthy risk to reward ratio.
✅ Consider using a trailing stop. With a coin that seems to go “up only” it can be hard to know when to take profit. Sell too early and potentially miss out on gains. Sell too late and your massive profit turns into a loss. A trailing stop allows you to set a stop loss that moves with price based on a ? defined percentage or dollar amount away from a security’s current market price. Check out my full Stop Loss ?Tutorial ?!