Lighter [LIT] was up about 18% in the past 24 hours, pushing its market cap above $1.20 billion.
The rally followed a seven-day correction and drew support from whale accumulation, network expansion, and a technical breakout.
However, falling Open Interest raised a sharper question. Was fresh demand driving LIT, or were short sellers being forced out?
Why is Lighter rallying?
Analysts like Michael van de Poppe have mentioned Lighter among selective altcoin runners, despite doubts that an altcoin season will ever happen again. This list included Hyperliquid [HYPE], Zcash [ZEC], Venice Token [VVV], and Near Protocol [NEAR].
He noted the selective altcoin season was due to thin liquidity. Michael van de Poppe wrote,
As long as there’s not much liquidity in the markets, you’ll have selective runners. In order to get more liquidity, Bitcoin needs to move higher.
But the liquidity question might have been addressed. The DEX was integrated into Circle’s chain, Arc, allowing traders and builders to deposit assets directly into Lighter from Arc. Bearing in mind Circle’s USDC business, stablecoin liquidity will eventually flow into the DEX.
Again, whales and retailers were buying the token.
One of the three wallets moving in sync withdrew 208.6K LIT at an average fee of $4.27 from Bybit and OKX but is yet to be staked. Its earlier withdrawals of 770K tokens were staked, bringing its total position to 979K tokens worth $4.24 million.
Therefore, fundamentals and network activity were bullish. Still, this outlook does not guarantee continuation on the charts.
Can LIT reclaim its $5.30 ATH?
LIT broke above a bull flag on the hourly chart, confirming a bullish continuation setup. The price had climbed 12% above the $4.38 breakout level but had not retested that area.
Its next major target was the previous all-time high of $5.30.
Meanwhile, the Chaikin Money Flow [CMF] rose to 0.18, indicating stronger buying pressure. Sustained capital inflows could help LIT retest $5.30. A clean breakout would return the token to price discovery.
Even looking at the Open Interest (OI) of the LIT/USDT perpetual contract on Binance, it reinforces the bullish tendency.
The OI is declining while the price is rising, indicating short covering. That is, traders who had bet the price would drop were buying back the asset to close out their losing positions. This forced buying pushed the price higher.
Final Summary
- Lighter rallied 18% after ending a seven-day price correction. Arc integration could provide Lighter with another route for stablecoin liquidity.
- Whale-linked wallets accumulated nearly 979,000 LIT worth $4.24 million.
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