Throughout all of history, there has been much lore and mysticism around the full moon and its impact on our environment. It is from the moon the word 'lunatic' is derived, so are we crazy to suggest such an association? Is there any merit to this belief and can we find associations between the lunar phases and market events?
In this post, we will look into prior full moons and their impact on the cryptocurrency market as well as an increasingly popular trading strategy that uses the lunar cycle as a trading strategy.
What is the Lunar Cycle Strategy?
The lunar cycle strategy is based on buying on the new moon and selling on the following full moon. This trading cycle is between 14-16 days.
Let's take a look at what occurred during some of the prior full moons.
November 8th, 2022 - Full Moon & Lunar Eclipse
On November 8th, there was a full moon (also commonly referred to as a blood moon) and a total lunar eclipse, a very rare combination.
A blood moon is defined as a total lunar eclipse that occurs during a full moon, meaning that the entirety of the moon is covered by the Earth's shadow. This blood moon is set to take place in the early hours of Tuesday morning and will be visible across North America as well as in parts of South America, Asia, and Australia.
It is believed when a full moon is eclipsed, it amplifies the intensity of the impact of the full moon.
This is what happened in the crypto market on the November 2022 full moon:
Over $200 billion was wiped out from the global cryptocurrency market in 24 hours.
The cause for this market crash was due to liquidity concerns about FTX's FTT token.
FTX's token plunges 80% on liquidity concerns, wiping out over $2 billion in value and resulting in a market crash.
On this day, the FTX token crashed from $25.81 to $2.05 causing a sea of red in the market and resulting in some of the lowest lows we have seen during the year, including a new low of $15,682 for BTC.
- FTT, the token native to FTX, lost most of its value on Tuesday, November 8th, after concerns pertaining to its liquidity were made public through a tweet by Binance indicating they wanted to sell their share of FTX tokens.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 Binance (@cz_binance) November 6, 2022
The tweet and subsequent selling of FTT tokens crashed the price of FTT and new lower lows in the market were seen, with a new 2-year low for Bitcoin.