Michaël van de Poppe - 10 September 2022
What is happening with LUNA?
Within crypto, we often see money circulating from one coin to another, and so it is important that when you are trading, you try to be ahead of the money flow.
Of course, we all know the money flow in the image below. We often see different flows following each other. First, the money flows from Fiat to Bitcoin (and nowadays often ETH as well). After these have risen, the money starts to rotate. First, the money flows to large caps, then to mid-caps and finally to low caps where the cycle starts all over again.
Another form of money flow is when the money rotates within a certain section. For example, during a certain period, the focus may be on DeFi. During this period, you will see coin after coin pumping, which is actually a continuous process of the same money rotating from coin to coin.
What are we currently seeing at LUNC and LUNA?
As we know, LUNC and LUNA are directly linked to each other, which is reflected in the money flow.
LUNC-USDT 1-hour chart
LUNC has made a run of almost 600%, with many people now cashing out their winnings. This is reflected in the sharp drop it is currently making. As you can undoubtedly understand, a lot of money was made during LUNC's run, and so a lot of money is being released as traders secure profits. But where is this money going?
LUNA-USDT 1-hour chart
Since LUNC and LUNA have much in common, it stands to reason that profits from LUNC would rotate to LUNA, which is what we are currently seeing. After the selloff on LUNC began, we immediately saw a pump on LUNA. This leads us to believe that profits have flowed from LUNC to LUNA, causing a pump of almost 300%.
How can you profit from this?
When a coin is experiencing an exponential rise, you can expect to see a strong dump once the coin reverses. This is simply due to the snowball effect that occurs when people start to secure profits. As you become more experienced in the market, you can start trying to get ahead of the market. When you see a coin pumping hundreds of percent in a short time, you can start looking for coins that have a relationship with this coin and anticipate a rotation of the money.