Lighter, the perpetual protocol DEX, saw its native token LIT rise by 11% over the past day as market sentiment shifted in favor of the bulls.
Indicator analysis and chart patterns point to further upside, although hurdles remain above the current price, which could slow the rally if momentum fades.
Golden Cross and MFI confirm their bullish momentum
The Lighter (LIT) rally follows a bullish crossover pattern known as the Golden Cross as the Moving Average Convergence Divergence Indicator sees its MACD line move above the 9-day signal line.
This trend usually precedes a strengthening rally, with momentum followed by price action and increasing histogram bars on the chart.
Meanwhile, the Money Flow Index, which tracks capital inflows and outflows from an asset, moved into bullish territory with a reading of 56.
Any reading between 50 and 80 is in the bullish zone. A slight decline in MFI from its recent highs indicates some profit-taking activity, but the overall figure confirms that the market remains in a bullish condition.
Resistance above price pushed LIT back three times
The upward trajectory, while largely bullish, still has a significant hurdle that AMBCrypto analysis has identified above current price levels. LIT is heading towards a higher resistance level that has historically prevented the price from moving further higher.
This resistance level has been a retracement site three times, each time sending LIT back to consolidate in the channel between support and resistance.
A clear break above this level with lasting momentum would be an important development for LIT, as it could open the door for a 34% rise towards $1.38, the top or starting point of the consolidation channel.
TVL loses $386 million since March
An on-chain signal worth closely monitoring is Total Locked Value, which measures the total value of crypto assets deposited into a protocol’s smart contracts spanning liquidity provision, trading activity, and yield generation.
A falling TVL generally signals that investors are withdrawing capital from the protocol, reflecting a reduction in long-term commitment.
Data shows that approximately $386 million has been withdrawn from Lighter’s TVL since March 1. As of press time, the TVL stands at approximately $488 million, according to DefiLlama, meaning the capital withdrawn is almost equal to what remains locked in the protocol.
The fees tell a more encouraging story. Traders raised protocol fees to around $116,000 in the last 24 hours, the highest figure since May 7, confirming that more transactions were completed during this period and user activity is increasing despite the TVL falling.
Final Summary
- LIT’s MACD printed a golden cross, with the IMF holding at 56 in bullish territory, indicating a 34% rally towards $1.38 if resistance dissipates.
- TVL has lost $386 million since March 1, reflecting a split between on-chain capital and user activity.
