Luna/UST Death Spiral Short
Capital Req:High
Entry Window:2022-04 to 2022-05
Exit Window:2022-05
Execution Directive:
Short LUNA heavily from $80 down to $0.0001 during the May 9-12 death spiral.
Preparation
Fund a Binance account with USDT margin and enable USDⓈ-M futures trading. Monitor the Curve Finance 3pool for UST imbalances and track the Luna Foundation Guard's (LFG) Bitcoin wallet.
Execution Steps
- The Signal (May 8-9, 2022): Massive dumps of UST occur on Curve, pushing UST off its $1 peg down to $0.98. The peg defense mechanisms are failing.
- Initiating the Short (May 9, 2022): As LUNA breaks below $60, open low-leverage (3-5x) short positions on LUNA perpetuals. The algorithmic mechanism will begin hyper-minting LUNA to absorb the UST supply.
- Riding the Spiral (May 10-11, 2022): The death spiral goes terminal. LUNA supply increases exponentially by trillions, diluting the price from $30 down to cents. Trail your stop-loss downwards.
Exit Strategy
On May 12, as LUNA crashes below $0.01 and Binance announces potential delistings, close all short positions immediately at market price. Do not wait for $0.00000. Exchanges will halt trading and delist the perpetual contracts; you must secure your profits before the matching engine goes offline.