Terra Luna Classic (LUNC) surged over 15% in a single day, fueled by a lawsuit filed by Terraform Labs’ bankruptcy administrator against trading firm Jane Street. The lawsuit alleges the firm used non-public information to trade before Terra’s 2022 collapse, contributing to approximately $40 billion in losses. Market data indicates a short squeeze, with open interest jumping from $100 million to $160 million. Analysts state the legal narrative is driving the price action, though the ultimate outcome remains uncertain.
Terra Luna Classic (LUNC) has surged double-digits, a delayed reaction to a recent lawsuit. The token is up nearly 30% over the past two weeks, according to CoinGecko data.
The price jump was driven by spot buyers, with derivatives data showing open interest climbing sharply. Futures data signaled a short squeeze was in play as the rally accelerated.
The catalyst traces back to a federal lawsuit filed against trading firm Jane Street. The suit alleges the firm used non-public information to execute profitable trades that accelerated Terra’s historic 2022 collapse.
The legal narrative has galvanized market interest in LUNC. Ryan Lee, chief analyst at Bitget, said it has “reignited trader sentiment around accountability and potential compensation.”
Lee noted that some traders are positioning on the belief that positive legal developments could shift market perception. “Headlines about alleged insider trading and renewed scrutiny of one of the sector’s largest historic losses have been correlated with short-term spikes in trading activity and price interest,” he said.
If spot-buying activity continues without the price dropping, the rally may extend. However, Lee cautioned that the ultimate legal outcome remains uncertain.
“If the lawsuit progresses or generates clarity, it may continue to influence sentiment,” he added. Any setbacks or dismissals could temper enthusiasm for the token.
LUNC’s jump comes amid a broader crypto market bounce that has brushed off short-term pessimism. Users on prediction market Myriad now put a 42% chance on Bitcoin rallying to $84,000, up from lows earlier in the week.
