Lighter [LIT] saw a significant increase of more than 10% in the last 24 hours as the cryptocurrency market bounced back from a brief downturn. After dipping below $1 billion, its Market Cap was on track to reclaim that valuation.
This surge was accompanied by token burns, heightened trading activity, and renewed market interest. But will these factors be enough to put an end to LIT’s correction?
What is driving the rise in LIT’s price?
One potential factor behind Lighter’s price increase is its buyback and burn mechanism.
The platform recently burned over 2.45 million LIT tokens, amounting to $9.50 million at the time of the press. This move reduced the circulating supply by 0.98%, with the tokens being bought back programmatically through the third quarter of 2026.
While reducing the supply can help support prices during a market recovery, it does not guarantee sustained gains on its own.
Additionally, real-world asset [RWA] perpetual futures activity has been on the rise across the sector. Year-to-date Cumulative Volume has surged from $21 billion to $4.25 trillion, driven largely by Hyperliquid [HYPE], Binance, and Lighter.
Social interest in Lighter has also been growing in anticipation of the platform’s Q3 investor update call, scheduled for mid-October.
Furthermore, the Altcoin Season Index has reached a yearly high of 65, indicating improving performance for altcoins. While this provides a supportive environment, LIT still faces its own challenges to overcome.
Can LIT maintain $3.50 and surpass $4?
On the charts, LIT had bounced back from a rising trendline support since May, but faced a correction after reaching $5.48 in late September.
A potential double bottom formation near $3.50 suggests a decrease in selling pressure. Confirmation of this would require a breakout above the $4 level.
However, unlike previous pullbacks in the past five months, LIT has not revisited the rising trendline, leaving the $3 level as a possible support if $3.50 is breached.
LIT could either recover from the double bottom or retest the trendline before attempting further gains.
Buying pressure has cooled off in the current session, with Cumulative Volume Delta [CVD] indicating aggressive selling outweighing buying by approximately -1.98K LIT.
Meanwhile, the Relative Volatility Index [RVI] has climbed from 26 to 61 in October, indicating increased upward volatility.
A confirmed breakout above $4 could set the stage for a $5 target. However, failing to hold $3.50 may lead to a trendline retest, while dropping below $3 could weaken the broader uptrend.
Final Summary
- Lighter’s price surge, fueled by token burns, expanding RWA trading activity, and investor interest, marked a gain of over 10%.
- The potential double bottom formation in LIT hinges on a breakout above $4, with $3.50 and $3 serving as critical support levels.
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