Overbought but unstoppable? LIT rallies 55% as demand stays strong

Lighter [$LIT] was one of the standout bullish performers in recent hours of trading. According to CoinMarketCap data, the DEX platform token has rallied by 9.48% in the past 24 hours and 54.95% in the past week.

Its Open Interest was up by 8.32%, keeping pace with the price gains of the previous 24 hours. Moreover, the predominantly negative funding rate has flipped positively, as $LIT prices climbed past the $2.20-$2.30 local supply zone.

The swift gains came on the back of the decentralized trading platform’s Q2 Investor Update Call. Among the major announcements in this call were that 100% of the protocol revenue goes toward token buybacks, with 6 million $LIT bought back in Q2. Token burns are also in the plans.

The platform costs were reduced, RWAs were growing, new order types were live, and more trading tools were on the way. The team was also working with the CFTC towards becoming a regulated exchange.

These announcements have likely given the altcoin the impetus to climb higher, but the move has been in the making for a few weeks now.

Examining the Lighter price structure

The 1-day chart showed a bullish structural shift in May, when the $1.32 local high was breached. Following this break, the trading volume began to expand as the prices climbed higher.

The RSI on this timeframe has been above neutral 50 for the entirety of the uptrend, showing steady upward momentum. It was at 79.7 at the time of writing, within the overbought area.

The OBV was also trending higher since May, showing steady buying pressure on the altcoin.

Traders’ call to action- Buy

There is potential for a pullback toward $2, and possibly as deep as $1.75, that swing traders and investors can consider as an ideal buying opportunity.

However, given the current momentum, such a pullback may not materialize. The current momentum might carry $LIT higher without a sizeable pullback.

The bullish idea would begin to crack if $LIT prices slip below $2.0 and $1.75, and the 4-hour bullish bias would shift bearishly upon a session close below the $1.47 swing low.

Final Summary

• Lighter rallied strongly after the Q2 Investor Call update that had platform-specific updates, staking updates, and buyback plans.
• The price action was firmly bullish, and a deep correction below the psychological $2 level did not appear likely.