The market is a zero-sum (technically negative-sum) game. All Trends Are Derived From Pain placed upon one side of the market. Currently, we see something somewhat sad happening with Luna. The people who got rugged by the luna Ponzi Scheme have decided to short in mass numbers on the New Luna Ponzi 2.0. The problem with this is that there are too many of them shorting. When too many traders take the same trade, and they end up being wrong, they end up being VERY wrong, and it's a situation like when we shorted APE earlier:
We were right long term, sure, but so many others saw the same thing and also shorted, so it pushed up to force us all out. That's what is happening here. The funding rate for Luna is currently -1.5% on OKX, which is the lowest funding rate any asset has ever reached as far as I know. It means that futures is trading at a dramatic discount to spot, and that people are willing to pay hand over fist to short this token. The problem as I said, is that if they are made to be wrong (price rises), they will all have to use market orders to exit their short position (market buy orders). This creates the potential for a big "scam wick" to the upside to occur.
Considering they pulled the rug once on this asset already, it goes without saying that we need a stop loss. LOL.
We were right long term, sure, but so many others saw the same thing and also shorted, so it pushed up to force us all out. That's what is happening here. The funding rate for Luna is currently -1.5% on OKX, which is the lowest funding rate any asset has ever reached as far as I know. It means that futures is trading at a dramatic discount to spot, and that people are willing to pay hand over fist to short this token. The problem as I said, is that if they are made to be wrong (price rises), they will all have to use market orders to exit their short position (market buy orders). This creates the potential for a big "scam wick" to the upside to occur.
Considering they pulled the rug once on this asset already, it goes without saying that we need a stop loss. LOL.