same vibe as the ones that say "you don't lose money if you never sell"
Wende Crispim
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If there's one thing I've learned here in a few weeks, it's that if you don't sell, you don't make a profit. If the price has risen and is giving you some profit, sell. The idea that the price will rise without stopping is unrealistic; at some point, it plummets. So, ensuring some gain is always better than gaining nothing.
🚨LUNC Crash from $119 to $0.00001 in a Single Day🤔🚨why?
The cryptocurrency world witnessed one of its most shocking collapses on May 7, 2022, when LUNC (Terra Luna Classic) plummeted from around $119 to a mere $0.00001 in a single day. This catastrophic event left investors reeling and the Terra ecosystem in shambles. Here’s a breakdown of what led to this dramatic fall and its aftermath.
What Happened to LUNC?
LUNC was an integral part of the Terra blockchain, a platform designed to support algorithmic stablecoins like TerraUSD (UST). The ecosystem was praised for its innovative approach, but that innovation turned into its Achilles’ heel. A chain of events, triggered by systemic flaws, led to LUNC’s catastrophic collapse.
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Why Did LUNC Crash?
1. TerraUSD (UST) Depeg
At the heart of the crash was the failure of UST, an algorithmic stablecoin designed to maintain a 1:1 peg to the US dollar. Instead of being backed by fiat reserves, UST relied on a complex algorithm tied to LUNC. When UST lost its peg, confidence eroded rapidly, triggering a sell-off of both UST and LUNC.
2. Liquidity Crisis
As panic spread, the Terra ecosystem faced a liquidity crunch. Investors were desperate to offload their holdings, but the lack of available buyers created a vicious cycle of plummeting prices. The liquidity shortage amplified the crash and left many unable to exit their positions.
3. Market Panic
The price drop sparked widespread fear. Investors, fearing a total loss, rushed to sell their LUNC holdings. This wave of panic selling caused an even sharper decline in price, fueling the downward spiral.
4. Algorithmic Flaws
Critics have long pointed out vulnerabilities in Terra’s algorithmic model. The system relied heavily on the assumption that market confidence in UST and LUNC would remain stable. When this assumption failed, the algorithm could not stabilize UST’s value, leading to an uncontrollable feedback loop of devaluation.
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What Were the Consequences?
The LUNC crash had far-reaching impacts, both financially and reputationally:
Massive Loss of Wealth: The collapse wiped out billions of dollars in market value. Retail investors and institutions alike suffered devastating losses.
Ecosystem Reputation Shattered: Terra, once seen as a beacon of innovation, became a cautionary tale of over-reliance on untested economic models.
Ripple Effect on Crypto Markets: The crash shook confidence in algorithmic stablecoins and the broader crypto market, leading to increased scrutiny and regulatory attention.
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Lessons from the LUNC Crash
The fall of LUNC serves as a stark reminder of the volatility and risks inherent in the cryptocurrency market. Algorithmic models, while innovative, require robust safeguards to prevent catastrophic failures. For investors, the crash highlights the importance of due diligence and diversification to mitigate potential losses.
The LUNC incident will likely remain one of the most significant events in crypto history—a story of ambition, innovation, and the perils of flawed execution.
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Final Thoughts
While the Terra ecosystem is attempting to rebuild, the scars of May 7, 2022, linger. As the crypto industry moves forward, both investors and developers must take these lessons to heart to prevent a similar disaster. #BTC100K! #CryptoHistoricMoment #CryptoMarketHype
This BTC (Bitcoin) is trapping people. In a 15-minute candle, BTC made a move of $90,000 USDT and showed people that it has retraced. Now, it is being portrayed that it will break $104,000 USDT again. But in my view, BTC has tricked people so that they open long trades. Now, watch as BTC slowly starts to drop. So, those trading BTC should be cautious.