LUNC Price Reclaims $0.0001 After Sell-Off—Can a Short Squeeze Push It to $0.00012?

Terra Classic has gained immense attention in the past few days as the price triggered a sudden rise of close to 190%. Although the volume behind the surge was below the average levels, it hinted towards a rise in the traders’ participation. Currently, the LUNC price has staged a strong recovery after a brief pullback, reclaiming the crucial $0.0001 level and reviving a strong bullish momentum. 

On the other hand, the current upswing seems to be backed by a strong spot accumulation, which may further lead to a short squeeze. With this, the question arises whether the LUNC price will rise above the pivotal resistance at $0.00014.

LUNC Price Gearing for a Sharp Recovery

As seen in the daily chart, LUNC is attempting to break above a long-standing ascending resistance trendline near the $0.00012 region. The latest rally has been supported by consecutive bullish candles and rising volume, indicating growing market participation. Meanwhile, the RSI continues to hover near the overbought zone, suggesting strong bullish momentum despite a minor cooldown.

The price currently trades above the key support at $0.0001, which now acts as an important psychological and technical level. If the price breaks the ascending trend line, a rise to $0.00141 could be imminent, which may further attract a significant buying volume. On the other hand, a failure could push the price back to the local lows below $0.00009. However, the technicals and the derivatives suggest a continued ascending trend. 

Terra Classic Open Interest Drops as Price Rises

Despite the bullish price action, Terra Classic’s Open Interest witnessed a notable decline after recently surging above $30 million. The drop in OI suggests that leveraged traders are gradually closing positions following the recent rally. Typically, falling OI during a price increase indicates that the market is reducing excess leverage rather than aggressively opening fresh long positions.

A rise in price alongside declining Open Interest often points toward short-covering or spot-driven buying activity instead of leverage-fueled speculation. This means bears may be exiting positions as the price moves higher, creating additional buying pressure. At the same time, the absence of aggressive leverage reduces the risk of an immediate long squeeze, making the rally structurally healthier in the short term.

However, if Open Interest continues to decline sharply, the bullish momentum could weaken over time due to the lack of fresh participation from derivatives traders.

Will LUNC Experience a Short Squeeze Toward Higher Targets?

LUNC continues to display bullish strength after reclaiming the key $0.0001 level, while the decline in Open Interest suggests the rally is currently being driven by short-covering and spot demand rather than excessive leverage. This setup keeps the possibility of a short squeeze active, especially if the price breaks above the immediate resistance near $0.00012. 

Such a move could force remaining bearish positions to exit, potentially accelerating the rally toward $0.00014 and higher levels. However, failure to sustain above $0.0001 may weaken the bullish structure and trigger a pullback toward the $0.000073 support zone.