The price of Lighter’s native token LIT came under heavy pressure after breaking below a key technical support level, extending its post-launch sell-off and confirming a broader trend reversal.
At the time of writing, LIT was trading around $2.07, down 20% in the past 24 hours. The token has now dropped 31% over the past week and is sitting roughly 73% below its all-time high of $7.86, which was set shortly after launch on December 30.
Over the last seven days, LIT has traded within a wide range, fluctuating between $2.07 and $3.21, highlighting ongoing volatility and uncertainty among traders.
Spot demand fades as derivatives activity rises
Spot market participation has weakened alongside the price decline. Trading volume fell 64% to roughly $15 million, signaling reduced demand as the token slipped below its former support zone.
Derivatives markets, however, tell a different story. Data from CoinGlass shows perpetual futures volume surged nearly 118% to $21 million, while open interest climbed 47% to $1.69 million.
This divergence suggests that most market activity is being driven by short-term traders and speculative positioning, rather than long-term accumulation.
Buybacks fail to shift short-term sentiment
Lighter is a perpetual decentralized exchange built on Ethereum, offering on-chain execution and zero-fee trading. The project raised $68 million in funding from investors including Founders Fund and Ribbit Capital, valuing the platform at $1.5 billion, before launching its LIT token in late 2025.
In early January, LIT briefly rallied toward $2.89 following the announcement of a treasury buyback program that allocates 50% of protocol fees toward token repurchases.
That rebound, however, proved short-lived. Much of the upside was driven by whale wallet activity, and momentum quickly faded as early holders took profits and broader sector rotation weighed on the token.
While Lighter has continued to expand its offerings — including tokenized stock products such as MSTR and CRCL, along with multi-signature wallet support — these developments have yet to meaningfully improve near-term market sentiment.
Technical structure remains bearish
On the 1-hour chart, LIT continues to display a clear bearish structure. Price has printed lower highs and lower lows since failing near the $3.10–$3.20 resistance zone, with each rebound attempt losing strength more quickly than the last.
The token is trading below the 50-period moving average near $2.23, which has turned into dynamic resistance and continues to slope downward. Attempts to reclaim this level have been repeatedly rejected, suggesting limited dip-buying interest.
Bollinger Bands are expanding rather than tightening, indicating that downside momentum remains active. Price is hugging the lower band, a sign that selling pressure has not yet fully exhausted.
Momentum indicators reinforce this view. The 14-period RSI is hovering near 28, firmly in oversold territory. While this increases the chance of a short-term bounce, RSI has struggled to reclaim the 40–45 zone, showing that sellers still dominate overall control.
The $2.30–$2.35 area, which previously acted as a base, has now broken decisively. Immediate support sits around $2.00–$2.05, where horizontal demand overlaps with the lower Bollinger Band. A sustained break below $2.00 would likely open the door to further downside in the near term.
