The cryptocurrency market is always volatile and it is this that makes the market unpredictable. These two things combined can spell disaster for the uninformed but cautious investor. Lookonchain, a well-known voice in the crypto community, recently warned against blind buying and panic selling after a user lost more than $2 million in just six months.
The “dumb money” user made his first mistake in September 2022, when the ETH price increased by 10%, buying 7,135 ETH for $12.25 million. Unfortunately, the price of ETH started to drop immediately after the purchase, causing panicked users to sell all their assets on September 16th for only $10.51 million in USDC.
Source: Lookonchain
On February 16, 2023, the user repeated the same mistake and bought 4,489 ETH for $7.65 million, and the price of ETH rose again by 10%. However, he repeated the same mistakes and sold all his ETH in a panic 8 hours ago, making a profit of only $7.33 million, a loss of $324,000 in a week. These ill-advised buying and selling decisions cost users more than $2 million in just six months.
Source: Lookonchain
The news of Lookonchain is a timely reminder for the crypto community. Blindly following the trend or panic selling is not a wise investment strategy. While buying a popular cryptocurrency at a premium may seem like a good idea, investors must remember that prices can fluctuate quickly and violently, leading to significant losses if the market tends to move against their investment. Likewise, panic selling assets can result in selling at a loss and loss of potential future profits.
In conclusion, it is important to do due diligence and due diligence before investing in cryptocurrencies. Investors should be cautious and calculated before making any investment decisions, and carefully evaluate market trends and risk tolerance. As Lookonchain warns, it is better to wait for the next opportunity than to risk significant financial loss. The cryptocurrency market is an unpredictable investment field, and investors must be aware of its risks before entering.
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