One year ago, the sun and warm weather were much more generous to us than they are today. By this time last year, I had already hosted a few barbecues outdoors, while nowadays, we're getting rain almost on a daily basis. Rain didn't catch me much last year, but I caught the rain (falling knives).
A year ago today, UST/LUNA crashed, and $40 billion in value disappeared from the total market capitalization in mere minutes. BTC went from 28k to 19k, and I bet it would have fallen even further if exchanges had not halted trading. This event teaches us a few lessons.
I wasn't into LUNA, and I didn't hold any UST when the crash began. But I thought the crash would make for a good trading opportunity, so I threw about $1000 into LUNA at $82. Then it fell to $20, and I threw another grand at it. The $20 floor was as thick as the spring morning drizzle, and in a blink of an eye, LUNA fell as low as $2.
I caught another falling knife and bought more, and I ended up buying the LUNA crash all the way down to a few cents per coin. I wasted about $3,500 in one day with LUNA, and it took me about two days to recover mentally from the loss. I couldn't believe I lost that much money.
Neither did I know that the bull market was already over for about six months or so. Hence, I deployed more capital, not on LUNA, but on EGLD, a crypto that I somehow became emotionally attached to. I bought my first EGLD coins between the $80 to $84 range, already seeing it going back to $500 in a couple of weeks.
Unfortunately, the market went down, and I bought even more, and now I'm carrying underwater bags. But I'm not that disappointed about that. I believe that in 2025, we will see new ATHs in crypto, and I'm confident that my investment will be fruitful.
So, what are the lessons that I learned from the LUNA crash?
Well, when you see a shitcoin burning, you don't bring water for the rescue, you just put more fuel on it. Had I opened short positions on LUNA when it crashed instead of catching those falling knives, I would have probably made so much money with that event that I'd have my own damn house right now.
Next, I want to mention falling knives. Even if you consider that the project is legit and has a good chance of recovery, you don't touch it until "there's proof" the dump is over. This might take days or even weeks. Rushing in and FOMOing is a bad way of buying less with more.
Last but not least, what this whole situation taught me was the fact that you don't always have to be in the market. You don't need to hold some coin or another unless you plan on doing so for many years and don't care what's going to happen in the next one or two years.
Sometimes you just need to sit on USDT or any other stablecoin and watch the market. Study the psychology of the masses and wait for the best opportunities. That's an important lesson that I learned thanks to LUNA and am willing to apply during the next bear market. Had I stayed on cash during 2022, I'd be in a much better position right now.
You have to learn one way or another, and probably the most valuable lessons are learned by going through painful events like the one I experienced with LUNA. What do you think?
Thanks for your attention,
Adrian
