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The crypto market has been suffering from a bear market for the past few weeks. The valuation of all major cryptocurrencies has plummeted, and new investors have become reluctant to invest in the space. This recent downturn proves an excellent example of how volatile and unpredictable the crypto market can be. However, these fluctuations also provide valuable lessons for those willing to invest in this space moving forward.
### A Market Cycle is Just a Natural Part of the Investment Process
The crypto market has seen its fair share of ups and downs, and it’s important to remember that these fluctuations are normal. It may be difficult for new investors to see the value in this volatility as it is. But those who have been investing in the space for a while are aware that these fluctuations are just a part of the process. Along with many other coins, we have seen how LUNA/UST plummeted down to nearly $0.
### Fundamentals Don’t Matter When it Comes to Investing in Crypto
Many factors contribute to changes in the value of cryptocurrencies. These factors include market sentiment, where the vast majority of people buy and sell based on how they feel about the market at a given time.
[Source](https://pixabay.com/vectors/chart-arrow-businessman-stock-6164414/)
Fundamentals are another contributing factor, but they don’t matter as much when it comes to investing in crypto. The current bear market is a perfect example of this. Regardless of how strong the fundamentals were for UST, LUNA’s parent company, their valuation plummeted towards the downward curve.
As it stands, you can see the potential for growth in the future, but you have to be willing to take a risk and invest now or you could miss out on an opportunity for a significant profit.
This is why fundamental analysis doesn't always hold up when investing in crypto and is often not always reliable over time.
### Lessons from the LUNA/UST Crypto Crash
The LUNA/UST crash is a good example of how unpredictable the crypto market can be. The UST tokens were priced at $1.00 when they launched, and within a few months, their price had increased. However, just a few days ago they began to sink below the $1.00 mark and are now trading at less than a dollar. This latest downturn is an excellent example of how volatile and unpredictable the crypto market can be.
These fluctuations don't take away those valuable lessons you need to have in handy as you continue to invest in this space. But then, you must learn never to ignore your gut instinct when it comes to making decisions with your money.
### Always Listen to Your Gut Instinct
The recent crash of LUNA/UST and the subsequent fallout among investors proves one thing: don’t ignore your gut instinct when it comes to making decisions with your money.
In Luna's case, you may be asking yourself why the massive fluctuation? After all, replacements happen all the time in the crypto world. Sometimes, they typically end up benefiting both parties involved. But this is where your intuition should have kicked in. It's often said, if something sounds too good to be true, it probably is.
The sudden spike in LUNA could not have been attributed to a new partnership or anything else. This is because there were no developments that would justify such a surge in value. So what happened? Did someone know something before everyone else? Did some insider information get leaked? Or was it just an extreme case of coincidence?
Regardless of the reason behind LUNA's rapid rise and sudden fall, you should always trust your instincts. And avoid any investment opportunity that seems too good to be true. Especially if you're dealing with cryptocurrencies like Bitcoin which is known for its notorious volatility.
### Conclusion
It's worth remembering that market cycles are very common in all markets, and LUNA must have brought in lots of FUD. This fear is understandable given how volatile the Bitcoin price has been over time. But you shouldn't let your fear get in the way of investing in a digital asset that could have major potential down the line.
After all, the cryptocurrency market is still young, so as it matures and becomes more stable, you should expect these fluctuations to become less intense over time.
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