The Rumble Fish 2

Lunatic difficulty is the hardest difficulty set in the game (after setting it in the options), the AI will get completely aggressive from here on in and will take more damage against you. However, you can also set the timer to 30 seconds if you are having trouble getting victories via K.O. Use your best character and check the command list for special and super moves to see what works against the opponent.

I suggest using Aran, as he's more of a well rounded character and has some special/super move inputs similar to Ryu from Street Fighter, along with his own unique moves as well.

The boss is very cheap, hard to beat. The game currently has a bug. Sometimes, the game slows down, the gameplay is in slow motion. Resetting the game will fix this bug. But you can use this to your advantage, with the slow down, you have more time to react. Also, when the bug is active, the AI seems to not dodge the majority of the projectile attacks. So, use a character with fast projectile attacks, I beat the boss on first try.