Yes, let's take the most classic example of Luna. You have 10,000 Luna. When you went to bed yesterday, it was worth 1 million U. When you woke up, it became 700,000 U. You said that I have been in the cryptocurrency circle for so long, and it only retreated by 30%, and UST only decoupled by 10%. I believe in DoKwon, so I went to bed again. The next day, I woke up and it became 10,000 U. At this time, you think that it has fallen by 99%, and it should have fallen to the bottom. I will buy it now and it will rise to 10 U, which is ten times. So you sell your house and get 200,000 U to buy 200,000 Luna. At this time, you can't sleep. You keep staring at it and hope it will rise back, but you can only watch the price go from 1 to 0.1 and then to 0.000001 and finally be delisted. In the end, in three days, your 1.2 million U assets have shrunk to the money for a breakfast. You are completely devastated.
Apart from Luna, there are many differences between the cryptocurrency market and traditional financial markets.
1. 7*24 hours without rest,
2. There are no price limits.
3. The entry threshold is extremely low,
4. The number of people abusing leverage is extremely high.
5. The fluctuations of altcoins are limitless.
Especially on the third, fourth, and fifth points combined, getting rich one night and going bankrupt the next is completely normal. Be cautious with leverage, everyone. You might think that a five-times leverage is already low, but you may not realize that there are days when the fluctuation exceeds 20%. Because of leverage, the more it falls, the harder it is to stop, ultimately leading to a chain of liquidations. Why can ETH reach over 800 in this bear market? Isn’t it because the liquidation prices on-chain are very clear, and there is capital to buy up the cheap corpses?
So for nighttime data like this, we respond to changes with consistency!
