Let’s take the classic example of Luna; you have 10,000 Luna, and while you were sleeping yesterday, it was worth 1 million U. When you wake up, it has dropped to 700,000 U. You say to yourself, I've been in the crypto world for so long, a mere 30% drawdown, and UST only depegged by 10%, I trust DoKwon, so I confidently went back to sleep. The next day, upon waking up, it has turned into 10,000 U. At this point, you think it has dropped by 99%, so it can't possibly drop anymore, right? If I buy the dip now and it goes back to 10 U, that would be tenfold profit, great! So you sell everything and put together 200,000 U to buy 200,000 Luna. Now you can't sleep, watching it closely, hoping it will rise again, but you can only watch the price drop from 1 to 0.1, all the way down to 0.000001, until it’s finally delisted. In just three days, your 1.2 million U in assets has shrunk to the price of a breakfast. You are completely devastated.
Except for Luna, there are many differences between the crypto world and traditional financial markets,
One, 7*24 hours without rest,
Two, there are no price limits,
Three, the entry threshold is extremely low,
Four, there are a large number of people abusing leverage,
Five, the fluctuations of altcoins are limitless.
Especially when points three, four, and five come together, it's not uncommon to get rich one night and be wiped out the next. Be cautious with leverage everyone; you might think that five times leverage is already low, but you don’t know that there are days when fluctuations exceed 20% every year. Due to leverage, the more it falls, the more it can't be stopped, 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 clear, and there’s capital rushing in to pick up cheap corpses?
So for data at night like this, we respond to changes with consistency!
