Lighter [LIT] bounces back from $3.6 – But is this a real reversal?

Is Lighter [LIT] seeing a trend reversal? The altcoin saw massive downside pressure, plummeting to a low of $3.6 after Robinhood tapped Bitstamp for eligible U.S. perpetual Futures. 

Now it seems the market tension has since cooled down. The negative feud started to fade after Vlad Tenev clarified the decision to pick Bitstamp.

He posited that  the decision was made because Bitstamp meets regulatory requirements for the U.S. market. 

With the clarification, pessimism reduced, with X account Pinedegen noting that Lighter remains part of Robinhood’s overall vision. 

The shift in market tone helped LIT get another upside footing. For that reason, LIT bounced back, reclaimed $4, and touched $4.1.

As of this writing, Lighter was trading around $4.05, up 8.4% on the daily charts.  Over the same timeframe, the Spot trading volume plunged 29%, reflecting a market slowdown.

Capital flows recovering too

After seeing strong capital outflows two days ago, the market behavior has shifted . For the protocol, especially USD inflows have recovered from a -$9 million drop.

On the 1st of October, Lighter Xyz saw $14 million in net inflows, adding to $7 million from the previous day. With protocol inflows rising, it indicated fresh demand for the network and native token.

On top of that, more funds have flowed into Perpetuals since the latest drop to $1.2 billion. In fact, Perps’ volume jumped above $2 billion, reaching $2.4 billion.

On Binance, this volume was mostly on the buy side for LIT. LIT’s perps buy volume on Binance rose to 3.08 million, outpacing sell volume at 3.05 million.

With funds flowing once again across these two areas, it reflected a shift in investor sentiment. Previously, such demand has played a vital role in strengthening upside push.

Can the reversal hold?

A look at Lighter’s structure showed that it is once again attempting another jump. For starters, the altcoin’s stochastic (Stoch) formed a bullish crossover and rose to 23.

This marked a significant reversal after falling sharply for consecutive days. At the same time, LIT flipped the 50-day EMA at $3.9. The flip signaled recovering short-term upside pressure. 

To confirm this upside move, the altcoin now needs a daily close above the 20-day EMA. In doing so, it will confirm the trend reversal and clear a path for a move above $5 again.

Final Summary

• Lighter [LIT] bounced back from a $3.6 slip, reclaimed $4, and touched a local high of $4.1, signaling a trend reversal
• Lighter rebounding as demand starts to recover, following Robinhood’s clarification on the decision to pick Bitstamp.