Here’s why Terra Luna Classic (LUNC) and Terra (LUNA) prices are rising

Terra Luna Classic (LUNC) and Terra (LUNA) have staged one of their strongest rallies in months, with both tokens surging on a mix of speculation and renewed attention on key developments surrounding the Terra ecosystem.

Terra Luna Classic price has risen by over 116% over the past week, while Terra (LUNA) price has soared by over 200% over the same period.

While two altcoins are still close to 100% down from their all-time highs, the current surge has drawn fresh interest from traders who had largely written off both assets.

Market sentiment shifts ahead of Do Kwon’s sentencing

A major driver of the renewed momentum is the approaching Dec. 11 US court hearing for Terra co-founder Do Kwon.

Do Kwon faces wire fraud and conspiracy charges tied to the 2022 collapse of the UST stablecoin, an event that erased about $40 billion in value.

Prosecutors are pushing for a 12-year sentence, but traders have been speculating on the possibility of a lighter outcome that could bring a sense of closure to the long-running legal saga.

This anticipation has amplified market volatility, with LUNA, now the native token of the Phoenix-1 Terra 2.0 chain, rallying sharply as traders positioned ahead of the verdict.

For many short-term traders, the sentencing represents a pivotal moment that could either extend the rally or trigger a rapid reversal depending on the outcome.

Speculation turbocharged by a viral moment

For LUNC, the rally came from a more unexpected spark.

A CoinDesk journalist appeared at Binance Blockchain Week Dubai wearing a vintage Terra t-shirt, and the image circulated widely across X and Telegram.

The moment triggered emotional nostalgia tied to Terra’s dramatic 2022 collapse and quickly turned into a cultural flashpoint for the community.

This viral moment also coincided with a surge in LUNC trading interest, as trading volume spiked across major exchanges, and traders poured back into the asset, driving its price nearly 100% higher within a day.

The rally also comes at a time when the token burn activity has accelerated.

So far, hundreds of millions of LUNC have been removed from circulation, fueling the perception of a shrinking supply and boosting speculative appetite.

Terra (LUNA) and Terra Luna Classic network upgrades

Beneath the headlines, both Terra chains have been preparing meaningful network improvements.

Terra (LUNA) pushed its v2.18 upgrade on December 8, introducing improved security features, tighter Cosmos interoperability, and an enhanced link between LUNA and USTC.

These changes provided a fundamental backdrop for the asset’s breakout.

On the LUNC side, the community began voting on its major v3.6.1 upgrade proposal, which seeks to update the terrad client, introduce fixes for legacy contracts, and enhance CosmWasm smart contract capabilities.

With more than 99% of votes in favour at the time of voting, the upgrade is on track for activation on Dec. 18.

Validators have already tested the release candidate on the rebel-2 testnet, giving the community more confidence in the rollout.

A fragile outlook for LUNC and LUNA

While the rallies have been strong, analysts caution that they remain event-driven.

LUNA faces the risk of a sharp reversal if Do Kwon’s sentencing delivers an unexpectedly harsh outcome.

LUNC’s gains, driven partly by viral social energy, could also cool once sentiment stabilises.