In this article, I will explore key trends and insights from the previous bull run of $Luna. Taking these learning can help us predict what might happen if there is another upcoming bull run for Luna. History never repeat itself, but it often rhymes.
Defining the bull run period:
A bull run is loosely defined as a period where market confidence is high with a lot of investors buying. This is also accompanied with sharp increase in prices. In the crypto world, it’s common to see prices 10x within a few weeks.
Graph below shows the price of Luna in January — May 2021
We see that Luna’s growth is highest during the start of February ($1.60) till the start of April($18.6), while reaching its all time high of $21 on March 21. Prices start to stagnate April onward followed by the May crash. Hence, we will define this 2 month period as the first bull run of Luna in 2021.
The graph above shows the period which we will be focusing on. During this 2 month period, Luna’s price increased 12x!
Number of buying and selling transactions for Luna:
The first metric we will look at is how many transactions were buying Luna and how many were selling Luna. This data included both Terraswap’s data and also the native swap in Terra station.
On reading the graph below:
- Black represents the daily price of Luna
- Red bars represent number of Luna-selling transactions
- Green bars represent number of Luna-buying transactions
On a high level, we see that the number of selling for each day is slightly more than the number of buying, at almost 2k transactions a day.
We also see a spike of 10k selling transactions on May 17, where Luna is almost at its all time high.
Insight 1: There were more transactions to sell Luna rather than transactions to buy Luna
Insight 2: Fomo buying is real — we see number of daily Luna buying increased during its peak between $18 — $21
Volume of buying and selling for Luna in USD
Next, let’s look at the value (in USD) of those buy and sell transactions.
On reading the graph below:
- Black represents the daily price of Luna
- Red bars represent value of Luna sold in USD
- Green bars represent value of Luna bought in USD
The daily volume of Luna sold/swapped to UST is between the range of 10M to 40M USD while volume of Luna buying is only at 1M.
At its peak on March 17, Luna sold reached 94M in volume while Luna bought is at 30M.
We see huge volumes of profit taking during the Feb — April bull run. In hindsight, profit taking was inevitable since people who bought in before February saw their Luna holdings doing a 12x in just 2 months.
Insight 3: Although the number of buying and selling transactions are almost equal, the volume of Luna sold outweighs the volume of Luna bought by at 20 times. Retail traders and whales were taking profits as they saw their Luna bags 12x during the 2-month period.
How many bought, sold or hodl-ed Luna?
Let’s take a look at how many addresses that sold, bought and bought and did not sold any during this period.
On reading the graph below:
- Red represents number of addresses that sold Luna for UST (14260)
- Green represents number of addresses that bought Luna with UST (9684)
- Blue represents number of addresses that bought Luna but did not sell during the 2 month period (2820)
The first observation from this chart is that number of sellers are more than the number of buyers, which is in line with what we’ve learnt in the ‘number of transactions graph’ where number of selling transactions is more than buying.
Insight 4: There are 47% more sellers than buyers.
Looking at the green bar, we see that only a small fraction of buyers who hodl-ed during the bull run.
Insight 5: 30% of buyers who bought Luna during this period did not sell any during this period too.
This also tells me that 70% who bought Luna between Feb and April have also sold in the same period — either buying at the top and selling when prices began to dip or bought in at the start of bull run and began selling near the top.
Summary of insights:
- There were more transactions to sell Luna rather than transactions to buy Luna
- Fomo buying is real — we see number of daily Luna buying increased during its peak between $18 — $21
- Volume of Luna sold (in USD) greatly outweighs volume of Luna bought. There are high volumes of profit taking as prices climbed 12x from the start of February to April 2021.
- There are 47% more sellers than buyers.
- Only 30% of buyers who bought Luna during this period did not sell any during this period too.
If we do see a bull run for Luna in the near future, we can potentially expect more sellers than buyers, with high volumes of Luna selling.
If there’s something we can learn here, it’s that profit taking during a bull run is inevitable — especially if prices hiked 12x. Be sure to plan your profit taking strategies and be wary of ‘Fomo’ buying as prices reach new all time highs.
