Lighter faced rejection at $3.79 and dropped to $3.2. This marked a major pullback after five consecutive daily closes at higher highs.
As of this writing, Lighter traded at $3.4 after sliding 4.5% on the daily chart. Its Trading Volume also dropped 24% to $122 million, suggesting reduced market activity.
Did Cumberland’s LIT transfer increase selling pressure?
It seemed that Lighter [LIT] retraced amid potential selling pressure from major market participants.
Onchain Lens reported that Cumberland had recently sold LIT on behalf of its clients.
Cumberland deposited 2 million LIT worth $6.94 million to OKX and Bybit through four 500,000-token transfers. Large transfers from liquidity providers such as Cumberland can attract market attention. They may also increase potential selling pressure.
Such transactions could contribute to short-term price declines if the deposited tokens enter the market.
Is LIT demand absorbing the selling pressure?
Interestingly, although Cumberland is selling, other market players are buying. And it seems the pullback has created another buying opportunity.
Furthermore, exchange activity also echoes this spot buying activity. According to Coinglass data, Lighter saw $23 million in Spot Outflow compared to $21.93 million in inflows.
As a result, Spot Netflow fell 755% to negative $1.07 million. A negative Spot Netflow indicated that more LIT left exchanges than entered them. That flow could signal accumulation if traders moved the tokens into private wallets.
Buying during a dip can absorb selling pressure and strengthen demand. That could create room for a potential recovery.
Onchain activity on the rise too
Lighter’s on-chain activity also increased significantly.
According to DeFiLlama, Lighter’s Active Addresses climbed to a monthly high of 17,600. New Addresses rose to 743. The rising Address count suggested increased network usage and adoption.
The rising user base also brought about increased capital inflow into the network. Over the past 24 hours, the altcoin saw $20 million in USD Inflows, a clear sign of strong network activity.
What’s next?
Although we have seen Cumberland sell LIT, the market demand remains steady. As a result, the altcoin’s bullish structure remains intact.
Lighter’s Stochastic Momentum Index (SMI) remained in the bullish zone near 64.
The SMI was falling while its signal line was rising. However, the indicators had yet to form a bearish crossover. That suggested buyers still maintained control of the market.
The ADX DI with SMA indicator further confirms the above view. Therefore, if demand holds, the altcoin’s recent pullback will be short lived, thus the altcoin will flip $3.7 and target $4.
However, if the selling activity from major players such as Cumberland continues, LIT will retest $3.1 support level.
Final Summary
- Cumberland deposited 2 million LIT worth $6.94 million to OKX and Bybit.
- LIT’s bullish structure remained supported by Spot demand and rising on-chain activity.
