Why is Lighter under $4 despite buybacks, CFTC filings, and $1.64B OI?

On the 22nd of October, Lighter [LIT] rebounded at $2.85 due to bulls regaining control after the October selloff. However, Lighter is facing a test that will ultimately define this bounce’s sustainability.

Although the price bounced toward $4.00, and the rally appears to be driven by new demand, this rally may be tested once sellers create downward pressure once again.

The price broke below $4.00, which acted as prior support, in late September and is currently testing those levels. Buyers have not been able to absorb the recent rejected sellers near $3.98. Therefore, it is unclear if the overall recovery is confirmed.

At press time, LIT had retraced to $3.66, which may be a result of profit taking by early entrants.

However, the RSI has surged to 63.27, indicating increasing strength in buying momentum as the price rebounds. In order to re-establish a bullish trend, a significant amount of volume needs to follow a breakout above $4.00.

On the other hand, holding $3.40–$3.50 would help preserve the recovery during a pullback. Losing that zone could weaken confidence and expose LIT to another decline toward $2.85.

Lighter targets U.S. market through CFTC licensing

That recovery may receive additional demand from Lighter gaining regulatory approval and expanding into the U.S. market. In November, Lighter plans to submit applications to the CFTC for licenses that cover perpetual futures and options.

In addition to the planned submission for CFTC licenses, Lighter is currently utilizing the existing partnership with Robinhood Chain. The partnership generates $17 billion in monthly perpetual trading volume on behalf of Lighter.

Meanwhile, the protocol’s Open Interest reached $1.64 billion in Q3, nearly doubling from the previous quarter, while Robinhood Chain held $454 million. These increases represent significant capital inflows leading up to the proposed regulatory approvals.

However, approval remains essential before it may expand domestically. If approved, expanded access could add additional traders and revenue streams to Lighter, and continued success will ultimately determine if Lighter achieves sustainable market share.

LIT buybacks link adoption to token demand

Beyond regulatory ambitions, Lighter’s long-term viability depends upon whether or not platform utilization drives consistent demand for LIT. The protocol produced approximately $2.8 million in revenue over 30 days, virtually all of which was used to fund buybacks of LIT tokens.

Meanwhile, Open Interest remains between $575 million and $785 million across deployments, indicating substantial derivatives activity. Spot volume also surpassed $140 million during the license announcement, reflecting heightened market participation.

Nonetheless, these figures alone cannot establish lasting demand. Continued trading activity and revenue generation along with continued buybacks must exist in order for LIT to sustain demand past the initial rally caused by the regulatory announcements.

Final Summary

• Lighter rebounded from $2.85 but must break $4.00 resistance to strengthen its recovery toward $4.60.

• LIT fee-funded buybacks are actively supporting token demand, while upcoming CFTC approval prospects remain a key catalyst for long-term growth.