Lighter [LIT] Altcoins have been trading in a downtrend, and the pressure has been close to collapse. LIT has been under intense pressure since it was rejected for $1.3 last week. Its lows have dropped.
LIT fell to its new low ever of $0.91, after breaking through the $1 level. At the time of publication, LIT was trading at $0.92 which is a drop of 10.19%. This adds to its weekly decline by 17%.
Holders of short positions have experienced a huge increase in their profits as the altcoin is on a steep decline. Onchain Lens It was reported that the whale with a 2-fold short position is now sitting on a profit floating of $2,07 million.
The increasing profit margins for short sellers reflect the intense downward momentum that is prevailing.
There is intense pressure to sell Lighter
Lighter continues to drop as sellers increase spending in panic after LIT fails to hold $1 support. This further causes the price to go down.
Buyers have virtually disappeared, as their market dominance has fallen to zero. The seller’s dominance soared up to 2.8 millions, which indicates a sell-side market.
The market has been dominated by sellers over the past week, reaching a peak of 4 million units while demand continues to drop.
Sellers’ Strength increased to 91 while buyer’s strength decreased to -8. This further validates the seller’s dominance.
Participants in the derivatives markets have reduced their risk and pulled significant capital out of the market.
Coinglass showed Lighter’s open interest fell from $193 to $140, or a decline of $54 millions.
The declining OI was a sign of aggressive trading as traders cut their exposure in the market, likely anticipating more losses. In the end, over $171 million was removed from the market.
Prices tend to fall when demand is weaker and the sell-side becomes more active. LIT was exposed to further risk due to the current market conditions.
What are the other downside risks?
As sellers became more aggressive, Lighter broke through the $1 support. The momentum for the downtrend increased as the selling pressure intensified.
The Relative Strength Index dropped from 55 to 32 as a result. This is almost oversold territory. RSI fell from 55 down to 32 in a straight line, reflecting the seller’s intensity.
As the altcoin held below both the MA and EMA (both of which were above $1), the momentum increased. Both of these momentum indicators indicate the possibility that the trend will continue, even if the market conditions remain the same.
LIT may therefore breach the support of $0.9 and continue to decline toward $0.85 if this trend continues. LIT must not only hold the $0.9 support but also regain $1 to see a trend reverse.
If you do this, your gains will be significant.
Final Summary
- Lighter [LIT] Dropped below the key $1 support. A new record low was reached near $0.91.
- The price remains heavily bearish, with weekly losses of 17% and pressure to the downside.
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Source: ambcrypto.com
