I can certainly empathize with you, @Simon-And-Victoria0. I have been caught with a low rate for a popular time as well. I looked at your profile because I was hoping you were a new host and could plead ignorance, but you do have some experience, 10 reviews, so I don't know how your case will be viewed. I never cancelled due to my mistakes of pricing and just chalked it up to learning curve.
Anyway, rule of thumb is never cancel a booking unless you can prove extenuating circumstances as you will not be able to book the dates. If you want to speak with Air BNB rep, here is a guide for contacting Air BNB.
https://community.withairbnb.com/t5/Help/Contact-Airbnb-A-Community-Help-Guide/m-p/16165#M728
BTW, what other hosts have done when Air BNB blocks dates due to host cancellation, is to book through another platform. Just a thought.