Terra (LUNA2) recouped some of its losses on June 9 as its price per token rose by as much as 67.5% on the day, taking many traders by surprise with their perpetual swap positions.

LUNA2 traders sell

- Advertisement -

In particular, the price of LUNA2 soared from $2 to $3.58. Volatile intraday moves coincided with liquidations of nearly $4 million worth of LUNA2 trades on Binance and Bybit, including $2.46 million in short positions, data from Coinglass shows.

Total gaps LUNA2. Source: Coinglass.com
- Advertisement -

Interestingly, LUNA2 funding rates on Binance and Bybit remained negative, suggesting that traders are still short despite the price surge.

History of LUNA2 funding rates. Source: Coinglass.com

FUD shadow wallets

- Advertisement -

Negative sentiment in the LUNA2 market has solidified mainly due to its poor performance in recent weeks, largely due to its association with Terra, an algorithmic stablecoin project whose native tokens are LUNA Classic (LUNAC; formerly known as LUNA) and TerraUSD (UST). ) collapsed in May. .

Terraform Labs (TFL), the firm behind the Terra blockchain, formed LUNA2 from the ashes of a $40 billion project. He distributed the refreshed token to investors who suffered losses from their investments in LUNAC and UST via an airdrop.

Apparently, these LUNA2 recipients decided to dump the token to recoup some of their losses, resulting in an 85% drop in its price less than two weeks after it peaked at $12.24.

Daily chart LUNA2/USD. Source: Trading View

Investors are also likely to keep their distance from LUNA2 amid accusations that Do Kwon, founder/CEO of TFL, lied about not holding LUNAC tokens. Notably, a self-proclaimed Terra insider who goes by the alias “FatMan” claims that TFL and Kwon own 42 million LUNA worth over $200 million.

The user also revealed five “shadow wallets” holding 42.81 million LUNA2 (worth more than $110 million at today’s price), noting that they all belong to Kwon.

“[Do Kwon] used his shady wallet to approve *his own proposal* through governance manipulation (TFL shouldn’t vote), told everyone it was going to be a community owned network, then gave himself a nine-figure score.” -Fat Man. supposedadding:

“These are only verified wallets – there are many others.”

TFL, Kwon under investigation

LUNA2 is also struggling with the growing attention to TFL, especially after it was already fined $78 million by the South Korean tax authority in May.

Anchor developer claims to have warned Do Kwon about unacceptable 20% interest rate

Moreover, South Korean prosecutors and police have launched an investigation into allegations that a TFL employee embezzled an undisclosed amount of Bitcoin (BTC) for the company.

In addition, the US Securities and Exchange Commission (SEC) also investigation whether TFL crypto tokens are illegal unregistered securities.

As a result, LUNA2 price has a high chance of lowering in June due to ongoing TFL issues, legal pressure and general bearish sentiment.

The views and opinions expressed here are solely those of the author and do not necessarily reflect those of Cryptooshala.com. Every investment and trading step involves risk, you should do your own research when making a decision.