Lighter [LIT] saw a rebound to $2.85 on the 22nd of October as bulls regained control following a selloff in October. However, the sustainability of this bounce is now being put to the test.
Despite a push towards $4.00 driven by new demand, the rally may face challenges as sellers exert downward pressure once more.
Having broken below the $4.00 support level in late September, Lighter is currently testing these levels. With buyers struggling to absorb rejected sellers near $3.98, the overall recovery remains uncertain.
Currently priced at $3.66, profit-taking by early investors may have contributed to the retracement.
Despite this, the RSI has climbed to 63.27, suggesting growing buying strength as the price rebounds. To establish a bullish trend, a substantial volume surge is needed above $4.00.
On the flip side, maintaining the $3.40–$3.50 range would help sustain the recovery during a pullback. Failure to hold this zone could undermine confidence and expose Lighter to a decline back to $2.85.
Lighter Eyes U.S. Market Expansion Through CFTC Licensing
Lighter is poised to attract more demand with plans to enter the U.S. market upon receiving regulatory approval. In November, the project intends to apply for licenses from the CFTC for perpetual futures and options.
In addition to the upcoming CFTC license applications, Lighter is leveraging its partnership with Robinhood Chain, generating $17 billion in monthly perpetual trading volume for the project.
Meanwhile, the protocol’s Open Interest surged to $1.64 billion in Q3, nearly doubling from the previous quarter, with Robinhood Chain holding $454 million. These increases signify significant capital inflows ahead of potential regulatory green lights.
However, regulatory approval is critical for domestic expansion. If granted, broader access could attract more traders and revenue streams to Lighter, with sustained success determining the project’s market share sustainability.
LIT Buybacks Tied to Adoption and Token Demand
Lighter’s long-term success hinges on platform utilization driving consistent LIT token demand. The protocol’s revenue of $2.8 million over 30 days was primarily allocated to buybacks of LIT tokens.
With Open Interest ranging from $575 million to $785 million and spot volume exceeding $140 million during the license announcement, substantial derivatives activity is evident. However, sustained demand requires ongoing trading activity, revenue generation, and buyback initiatives post-regulatory announcements.
Final Thoughts
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Lighter has rebounded from $2.85 and must overcome the $4.00 resistance to solidify its recovery towards $4.60.
- LIT token demand is supported by fee-funded buybacks, while the potential for CFTC approval remains a pivotal factor for long-term growth.