- Short Liquidations: Massive LUNC short positions liquidated, accelerating price surge and bullish momentum.
- Token Burns: Weekly burns exceeded 427 billion LUNC, reducing supply and supporting upward movement.
- Technical Breakout: LUNC broke the descending trend channel, showing strong bullish signals despite resistance near July highs.
Terra Luna Classic — LUNC, recently caught traders’ attention after surging more than 90% in just 24 hours. This marks its second consecutive day of impressive gains, pushing LUNC to second place among trending tokens on CoinMarketCap. Investors are now closely watching the market, trying to understand what sparked this sudden rally. Despite negative news surrounding founder Do Kwon, LUNC has defied expectations, leaving many questioning the main drivers behind this sharp upward movement.
Short Liquidations Drive Momentum
A significant factor behind LUNC’s surge is massive short liquidation. Traders betting against LUNC faced heavy losses as prices climbed rapidly. CoinGlass data shows LUNC led all crypto pairs in short liquidations, ahead of Ethereum and Bitcoin. Over $1.47 million in shorts were liquidated within one hour, with $5.19 million wiped out in 12 hours. This accounted for around 10% of all short liquidations in the market. Short squeezes often accelerate rallies, and LUNC’s price benefited from this dynamic.
Even alternative tokens like Do Kwon’s LUNA drew some liquidity, indicating the market activity was broad-based. Traders rushing to cover positions added fuel to an already strong bullish momentum, reinforcing upward pressure on the token. The timing of these liquidations coincided with heightened attention on Do Kwon’s upcoming case decision on December 11th. Despite previous fraud-related convictions, investors reacted in unexpected ways, showing that market sentiment can sometimes move contrary to news.
Token Burns and Technical Strength Support the Rally
On-chain activity also played a crucial role in LUNC’s gains. Weekly token burns surged to over 427 billion LUNC, with 84.164 million burned in a single day. The largest burns occurred on December 1st and 5th, exceeding 600 million tokens. Terre Form Labs contributed the most, accounting for roughly 58% of all burns. These supply reductions improved scarcity, supporting upward price momentum.
From a technical standpoint, LUNC broke above a descending trend channel on the 4-hour chart. The breakout ended a month-long consolidation period, signaling renewed bullish strength. MACD bars were strongly green, and the Cumulative Volume Delta exceeded $41 million in favor of buyers. Over the last two days, LUNC rose more than 157%, climbing from $0.00002739 to $0.00007088.
Yet, sellers are defending resistance near July’s highs, which could limit further upside. For the rally to continue, bulls must maintain control and overcome lingering bearish pressure from previous declines. The combination of short squeezes, increased on-chain burns, and technical breakouts fueled this rapid rise. While some caution is warranted near resistance levels, the current momentum demonstrates strong investor interest.
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