LUNA2 traders are more and more short despite 67.5% rally, $4 million liquidated

Terra (LUNA2) reversed part of the losses this June 9 since it’s cost per token rose up to 67.5% at the time, catching many traders off-guard using their perpetual swap positions.

LUNA2 traders are shorting it

At length, LUNA2’s cost soared from $2 up to $3.58. The volatile intraday move coincided using the liquidation of nearly $4 million price of LUNA2 trades on Binance and Bybit, including $2.46 million price of short positions, data from Coinglass shows.

Total LUNA2 liquidations. Source:

Interestingly, LUNA2’s funding rates across Binance and Bybit continued to be negative, suggesting that traders continue to be short regardless of the cost bounce. 

LUNA2 funding rates history. Source:

Shadow wallets FUD

The down-side sentiment within the LUNA2 market has strengthened mainly due to its underperformance in recent days, brought by its connection to Terra, an algorithmic stablecoin project whose native tokens LUNA Classic (LUNAC formerly referred to as LUNA) and TerraUSD (UST) collapsed in May.

Terraform Labs (TFL), the firm behind the Terra blockchain, created LUNA2 in the ashes from the $40 billion project. It distributed the revamped token among investors who’d endured losses using their LUNC and UST investments with an airdrop.

Because it seems, individuals LUNA2 recipients made the decision to dump the token to recuperate a few of their losses, thus pushing its cost lower by 85% under two days after it peaked at $12.24.

LUNA2/USD daily cost chart. Source: TradingView

Investors will also be likely keeping their distance from LUNA2 among allegations which do Kwon, the founder/Chief executive officer of TFL, has lied about getting zero LUNAC tokens. Particularly, a self-announced Terra insider, known through the pseudonym “FatMan,” claims that TFL and Kwon own 42 million LUNA worth over $200 million.

The consumer also revealed five “shadow wallets” that hold 42.81 million LUNA2 (worth over $110 million at June 9’s cost), noting they all fit in with Kwon.

“[Do Kwon] used his shadow wallet to approve *their own proposal* through governance manipulation (TFL isn’t designed to election), told everybody it might be a residential area-owned chain, after which gave themself a nine-figure score,” Fatman alleged, adding:

“These are merely the verified wallets — there are lots of others.”

TFL, Kwon under analysis

LUNA2 struggles due to the growing scrutiny around TFL, particularly after it had been alfined $78 million by South Korea’s tax regulator in May. 

Related: Anchor dev claims he cautioned Do Kwon over unsustainable 20% rate of interest

In addition, South Korean prosecutors and mother and father launched an analysis following allegations that the TFL worker embezzled an undisclosed quantity of Bitcoin (BTC) fro the organization.

Furthermore, the U.S. Registration (SEC) can also be investigating whether TFL’s crypto tokens are illegal unregistered securities.

Consequently, LUNA2’s cost includes a high possibility of heading reduced June using the ongoing trouble for TFL, legal pressures and overall bearish sentiment. 

The views and opinions expressed listed here are exclusively individuals from the author and don’t always reflect the views of Every investment and buying and selling move involves risk, you need to conduct your personal research when making the decision.

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