thats not a disaster thats a greedy scam investor.
Fahad Hossen Akash
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LUNA - The Biggest Crypto Disaster in History 📉 $40 Billion Lost in Just One Day The untold story of the collapse of Terra (LUNA) 🧵
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1/14 The Terra (LUNA) collapse has become one of the most catastrophic failures in the history of cryptocurrency. Let's break down how the algorithmic stablecoin model failed, the series of events that led to the disaster, and what crypto investors can learn from it.
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2/14 Terra aimed to revolutionize payments with its algorithmic stablecoin, UST. Unlike traditional stablecoins like USDT, which are backed by reserves, UST was supposed to maintain its $1 peg through a relationship with Terra’s native token, LUNA.
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3/14 The concept was simple: users could always exchange 1 UST for $1 worth of LUNA. LUNA was burned to mint UST and stabilize its value. But, as we soon learned, this mechanism had critical vulnerabilities. When stress hit the system, it turned into a death spiral.
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4/14 In May 2022, UST started to lose its $1 peg after major withdrawals from Anchor, a DeFi platform crucial to Terra's ecosystem. Anchor offered up to 20% annual yield on UST deposits, attracting over 70% of the UST supply.
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5/14 When users began to doubt the sustainability of Anchor’s high yields, they rushed to withdraw their funds, creating massive selling pressure on UST. As UST fell below $1, the system minted more LUNA to restore the peg. This flooded the market, causing LUNA’s price to collapse.
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6/14 The crisis escalated quickly. UST lost its peg entirely, plummeting to as low as $0.10. Meanwhile, LUNA’s supply exploded from around 350 million tokens to over 6.5 trillion in a failed attempt to stabilize UST. LUNA’s price plummeted from $80 to nearly $0.0001 in just days.
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7/14 As the collapse unfolded, all eyes turned to Do Kwon, the confident founder of Terra. Known for his bold claims and defiance of critics, his tone shifted from arrogant confidence to desperate damage control as the project crumbled.
this is effective for scalp trader. but in my case as swing trader this event is no effect on my strategy. this event normally happened after a short range of accumulation phase.
EL-SHADDAI
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How They Liquidate You: A Trader’s Nightmare (And How to Avoid Being Caught)
A few weeks ago, I was shorting Bitcoin when a massive red candle dropped, and then, out of nowhere, a huge bullish wick began to form. The price surged up quickly, signaling a potential reversal. Instead of panicking, I waited for a few seconds to see which way the market would head. Sure enough, the price started to reverse, and I flipped my position to long.
This is a perfect example of a liquidity grab in action. Large players in the market use these sharp moves to trigger stop losses and force traders out of their positions. In my case, I was able to spot the reversal and capitalize on it. But if I had been in a long position during that event, my strategy would have been tested. Fortunately, with my DCA approach in place, it likely would have saved me from getting wiped out by the quick price swings.
Liquidity grabs don’t just involve traders closing their positions—they involve the market makers deliberately triggering stop losses, often causing traders to liquidate their positions, leaving them on the sidelines when the price reverses.
By staying calm and waiting for signs of a reversal, I was able to avoid falling into the trap. In the event I’d been in a long position, my DCA strategy would’ve stepped in to mitigate the damage, allowing me to stay in the trade and ride the price reversal.
I recorded the entire event, and I’m sharing it below so you can see exactly how it looks in real-time.
These market movements are designed to manipulate traders and cause panic. The key is understanding how to spot these grabs and avoid getting swept away. In my next post, I’ll explain how to visualize liquidity grabs using a heatmap and give you strategies to beat them.
Follow my lead copy trading account for more tips on staying ahead of the game. Click here to copy and 💰🚀 . Cheers and happy trading.
just got liquidated again and again. I'm really done. I lost $209 in total since November. I had fun and it's frustrating. no more futures. conclusion: spot trading. but nah I'm off for this I'll come back when my mentality can handle losses and fomo
This is sad, but my advice trade with low leverage always put stop loss. trade 2% of total capital. set a target profit. use s&r, trendline as your guide to enter trade and repeat.