LIT rises 12% after 2.5 million LIT buy as price tests $1 level

The decentralized exchange (DEX) narrative is gaining momentum again, with Lighter (LIT) among the trending tokens in the sector. LIT posted more than 12% in daily gains, though traders are watching whether demand can sustain further upside.

Whale leverage and short liquidations drive the move

Market activity tied to leveraged positioning and DEX-related attention helped push LIT higher. One whale reportedly opened a 5x leverage long position of 2.5 million LIT tokens at an average price of $0.9184. The purchase contributed to a rally that broke above $1, moving the position above the liquidation price of $0.8566.

The position is currently showing an unrealized profit of more than $493,000, with a position value of $2.789 million. The article also notes that other traders were accumulating the token.

In addition, liquidation of shorts between $1.069 and $1.10 accelerated the upward move. Price action then encountered denser liquidity clusters between $1.11 and $1.18, which the article says could become a target as sell-side liquidity is tapped.

DEX capital rotation and social mentions

Capital rotation into DEX tokens also featured in the rally. Mentions for EdgeX (EDGE) reportedly spiked across social platforms such as X. EDGE had fallen more than 10% over the prior 24 hours, but then recovered and rose 4%.

Key levels: $1.13 test and $1.18 liquidity cluster

Technically, the article describes LIT as forming higher highs (HH) since late March. Each breach of a prior high was followed by a correction that ended at a retest zone.

On the hourly chart, LIT is described as respecting an ascending trendline and approaching the previous high at $1.13. A break above $1.13 could set up a move toward the $1.18 liquidity cluster.

Derivatives data: open interest rises, volume cools

On Binance perpetual contracts for the LIT/USDT pair, open interest (OI) rose from $25 million to $31 million. Net volume also increased to a daily high of 1.22 million LIT tokens, but later retraced nearly fully, suggesting profit-taking.

The article adds that long liquidation leverage was forming just below the $1 level, but the liquidity cluster there was described as light. It questions whether bulls can defend against a potential revisit of that area.

What could happen next

The article states that if LIT faces rejection, it may fall back toward the ascending trendline support or at least to 50% of the move from $0.97. It also highlights $1.05 as a potential buy wall.

Final summary

• LIT rallied about 12% amid capital rotation to DEX tokens, whale buying, social media mentions, and short liquidations.
• The token faces a key test near $1.13, which may determine whether it can reach the $1.18 liquidity cluster.