Lighter's native token LIT suffered a sharp decline on July 23, breaking below the critical support level of $2.30 and confirming a bearish trend reversal. At press time, LIT was trading at $2.07, down 20% over the past 24 hours. The token has dropped 31% over the past week and is now roughly 73% below its all-time high of $7.86, set shortly after the Dec. 30 launch. Over the past seven days, prices ranged between $2.07 and $3.21.
Spot Volume Drops, Derivatives Heat Up
Spot market activity has slowed alongside the price decline. Trading volume fell 64% to $15 million, pointing to reduced demand as LIT slipped below its former support. In contrast, derivatives data tells a more active story. According to CoinGlass, perpetual trading volume jumped nearly 118% to $21 million, while open interest climbed 47% to $1.69 million. This divergence suggests that most positioning is geared toward short-term momentum rather than long-term exposure.
Buyback Fails to Spur Recovery as Early Holders Exit
Lighter is a perpetual DEX built on Ethereum, offering on-chain execution and zero-fee trading. The project raised $68 million in a funding round led by Founders Fund and Ribbit Capital, achieving a $1.5 billion valuation, before launching the LIT token in late 2025. In early January, LIT saw a brief push toward $2.89 after Lighter introduced a treasury buyback program that directs 50% of protocol fees toward repurchasing tokens. The initial rebound was mostly fueled by whale wallet activity, but momentum quickly faded as early holders sold and sector-wide rotation weighed on the price. While Lighter has expanded its product line to include tokenized stocks such as MSTR and CRCL, as well as multi-signature wallet support, these upgrades have yet to shift near-term sentiment.
Technical Analysis: Bearish Structure Intact, RSI in Oversold Territory
LIT's 1-hour chart shows a clear bearish structure. Price has been posting lower highs and lower lows since failing near the $3.10-$3.20 zone. Each rebound attempt has stalled sooner than the last, keeping sellers in control. LIT is trading below the 50-period moving average near $2.23, which now acts as dynamic resistance and continues to slope downward. Attempts to reclaim this level have failed, indicating little dip-buying interest. Bollinger Bands are expanding rather than contracting, with price closing in on the lower band, signaling that downward momentum remains strong rather than exhausted.
Momentum indicators echo this weakness. The 14-period relative strength index (RSI) sits near 28, deep in oversold territory. While this increases the odds of a short-term bounce, RSI has struggled to reclaim the 40-45 zone, showing that bearish pressure still dominates. The $2.30-$2.35 area, previously a support base, has broken cleanly. Price is now leaning on support around $2.00-$2.05, where the lower Bollinger Band and horizontal demand align. A break below $2.00 would expose the token to further downside.