After the Lighter crypto token dropped to a low of $1.53, buyers stepped in and defended the market from further slip. As such, LIT successfully defended the $1.5 support level and jumped to a local high of $1.85, only to slightly retrace.
As of this writing, Lighter [LIT] traded at $1.81, up 16.4% on the daily charts. This price uptick was backed by a 16% jump in trading volume, reflecting bullish momentum.
Lighter sees renewed demand
After LIT tested $1.5, traders in the Futures market rushed to take strategic positions. According to CoinGlass data, the altcoin’s Open Interest (OI) climbed 16% to $145.7 million while Volume rose 28% to $178 million.
When OI and Volume rise in tandem, it signals increased participation and capital flows into the futures market.
In fact, the altcoin saw over $83.37 million in Futures Inflow compared to $79.2 million in outflows. As a result, Futures Netflow jumped 237% to $4.08 million, indicating buyer dominance in the futures market.
Meanwhile, the altcoins Long/Short Ratio climbed above 1, to 1.004, with Binance Top Traders dominating. A ratio above 1 suggested that most traders rushed into the market and took long positions, signaling market bullishness.
Whales stake $2.3 million worth of LIT
Interestingly, during the price pump, investors, especially whales, turned to the network’s staking pool. According to Winngamer, two whales deposited $2,322,712 worth of LIT into the lighter staking pool.
The first whale deposited $2,084,712 in LIT after holding the funds for a month. The second whale deposited $238,000 in LIT after holding the funds for 1 month.
Typically, when investors turn to staking, it signals long-term conviction while they lock tokens to earn yield.
Even more importantly, locking tokens into the staking pool reduces supply, thus rising scarcity, a major boost for potential price appreciation.
On top of that, the Lighter team has been extremely active on the token buyback side. As such, the team has spent most of its fee revenue on LIT buybacks.
In fact, Cryptolycus reported that the Lighter buyback program has repurchased over 2.4 million LIT in less than a month.
Usually, increased buybacks also reduce supply, thereby increasing the risk of a supply shock. With demand for staking and tokenbacks, these two combined position the altcoin on a positive trajectory.
Is this demand enough to flip $2?
LIT successfully defended $1.5, as demand returned from across all market participants. With capital flows into futures, whales staking and token buybacks, its upside momentum strengthened.
As a result, the altcoin’s Relative Strength Index (RSI) made a bullish crossover, but still failed to flip 50, now settling at 49. Likewise, the altcoin flipped its short-term moving average, EMA50, signaling strengthened upside momentum.
With RSI making a bullish move but still held within the bearish zone, it signaled the buyer’s attempted market takeover. For the bullish continuation, the altcoin’s RSI must flip 50, edge into the bullish zone, and also flip EMA20.
In doing so, the upside strength will be validated, boosting it to reclaim $2 and target $2.5 resistance. If this attempted takeover fails, LIT will retrace towards $1.7, with $1.49 as the key support level.
Final Thoughts
- Lighter successfully defended $1.5 and jumped to a local high of $1.8 amid renewed demand
- Whales turned staking, as they staked $2.3 million worth of LIT while token buybacks surpassed 2.4 million LIT.
