Lighter (LIT) the decentralized exchange challenges established DEXs like Hyperliquid in terms of volume traded on perpetual futures contracts. IIts activity has kept pace with the broader market rebound, with LIT up more than 13% in 24 hours at press time.
Despite mixed feelings among holders, the token gained during the weekend rally. In a broader context, its price has remained relatively stagnant, but commercial activity has seen a notable increase.
Perps Volume Pushes Daily Price Gains
Perp volume is taking a new path in crypto, driven by the hype of DEX trading that comes with higher leverage and privacy features. LIT emerged as one of the most popular, ranking in the top four.
Over the past week, criminal volume has increased by more than 34%, according to DefiLlama. Only Hyperliquid (HYPE) and Aster (ASTER) took a larger share than LIT.
In addition to this, the Lighter network reached a new daily record in terms of revenue volume of $7.53 billion for this year. All of these factors played a role in the price recovery, although gains were seen across the majority of altcoins.
Source: DéfiLlama
Despite the surge, partly due to increased trading volume and trading activity of the exchange token, the token has remained stagnant. But why is it stagnating when gains are in double digits?
Why is the price of LIT still stagnating?
Over the past month, LIT/USDT has bounced between the $1.40 and $2.04 areas. The scale of the period was sufficient to draw such a conclusion. However, the move brought attention to the altcoin.
On the 4-hour chart, LIT had just moved above the SuperTrend indicator, indicating that bulls were starting to pour in. The accumulation/distribution showed that approximately 94.88 million LITs were distributed.
Source: LIT/USDT on TradingView
This explained why the altcoin was still selling off. Most of the tokens were shorted, even though the price was above the midpoint of its latest sideways consolidation.
Only a break above $1.805 and $2.041 can support the uptrend. Otherwise, the consolidation continues in bearish territory.
However, given the mixed feelings between whales and retail, the recovery could be short-lived.
Tug of war between whales and retail!
Retail traders were buying mainly due to recent gains. Retail traders were placing long orders for LIT tokens as high as $800 on the Uniswap (UNI) DEX, according to Etherscan. There were also a few sales that matched what the whales were thinking.
Source: Etherscan
For whales, they continued to add more sell orders. According to data from Onchain Lens, a whale has opened several short positions, including LIT.
This whale was making a profit of $1.59 million from trading LIT with 3x leverage. This result occurred despite the day’s gains.
As such, this gives whales an advantage, even if retail capitalizes on the short-term retracement. For a breakout or reversal, whales must reverse their bias.
Final Thoughts
- Perpetual futures volume, which soared 34% this week, drove LIT’s 13% rise.
- Whales continued to sell, putting the altcoin under selling pressure despite retail buying.
