Why is Terra’s LUNA Crypto Rising So Much This Week?

Terra’s LUNA token has jumped more than 250% in the past ten days, sharply outpacing the broader crypto market.

Here’s what’s driving its rally so far.

Terra Network Upgrade, Do Kwon’s Sentencing Lifts LUNA Prices

LUNA’s rally began shortly after the network executed its v2.18 upgrade on Dec. 7, a technical patch aimed at improving node performance, resolving memory-related bugs, and stabilizing the chain after months of intermittent reliability issues.

Simultaneously, markets priced in the sentencing of Terraform Labs co-founder Do Kwon, scheduled for Dec. 11, 2025, in Manhattan federal court.

After pleading guilty to fraud charges tied to the 2022 TerraUSD collapse that erased roughly $40 billion in market value, prosecutors are seeking a 12-year sentence, while the defense is arguing for a lighter term.

This legal milestone has become a catalyst for speculative positioning: traders are betting that the legal “overhang” will be resolved one way or the other, prompting short-term volatility.

LUNA has responded with a notable lift in trading volumes and price gains as the date approaches.

LUNA Technicals Show Bounce is Peaking Out

LUNA’s surge also aligns with its long-running descending channel, a structure that has dictated its price since mid-2022.

Each time LUNA has touched the channel’s lower trendline, it has staged extreme relief rallies, including a 417% bounce in late 2022, 185% in mid-2023, and 220% in early 2024, all driven by thin liquidity and aggressive short covering.

The latest rebound follows the same pattern: LUNA wicked into the lower boundary in late November 2025 before exploding more than 240% toward the channel’s midline.

Historically, these reactions have had little to do with fundamentals and everything to do with oversold conditions, crowded bearish positioning, and opportunistic volatility spikes.

That said, LUNA’s rallies have repeatedly topped out near the channel’s upper trendline, which is where upside typically stalls before reversing lower.

With the latest bounce now losing momentum beneath that ceiling, the chart risks another full-cycle retracement toward the lower trendline near $0.05, consistent with prior multimonth reversals.