Is LIT's burn worth $42 million enough to spur the altcoin's next big rally? - AMBCrypto
Lighter [LIT] has rallied by 3. 68% in the last 24 hours with a daily trading volume spike of 13. 52%. Over the past week alone, the token rallied by 18%. In a recent report, AMBCrypto warned that the token was. . .
Lighter [LIT] has rallied by 3. 68% in the last 24 hours with a daily trading volume spike of 13. 52%. Over the past week alone, the token rallied by 18%. In a recent report, AMBCrypto warned that the token was potentially overbought and might see a correction toward $2. Now, in the days after, LIT did fall by around 13% to reach $2. 3. However, it has since climbed back to $2. 60 once more. Source: EtherscanIn a post on X,Lighterrevealed the burn of just over 15. 6 million LIT tokens, worth more than $42 million. It represented approximately 6. 3% of the LIT circulating supply of 250 million tokens and 1. 5% of the total supply of 1 billion. This massive burn on 10th of July could have sparked short-term bullish momentum for the altcoin. In fact, the price action showed that a move towards $3 might not be far. Why Lighter price trends might be overextendedSource: LIT/USDT on TradingViewThe 1-day chart revealed a bearish divergence. The RSI made a lower high while the price made a higher high, a classic bearish divergence. The volume trends were steadily bullish, but the bearish momentum divergence warned of a potential price pullback. Despite the divergence though, demand for the altcoin has beenstrong. Based on the swing move higher from $0. 83 to $2. 76, Fibonacci retracement levels were plotted. If LIT falls below $2. 30, the 23. 6% Fibonacci retracement level, swing traders and investors can wait for a deeper retracement. Patience is required until then. Traders’ call to action – Play the rangeSource: LIT/USDT on TradingViewThe 1-day chart warned of a pullback. The 4-hour chart showed a range formation between $2. 31 and $2. 68 form. Neither extreme of the range has been breached so far after two tries in July. Traders can wait for a bullish breakout past $2. 70 to buy LIT, targeting $3. 06 and $3. 21. On the other hand, a breakdown below the $2. 31 range low, and the 23. 6% Fibonacci retracement level on the 1-day timeframe at $2. 30, would indicate a pullback below $2 was becoming more likely. Final SummaryDemand and bullish momentum for Lighter continued to hold sway, despite a bearish momentum divergence signal. Traders would want to watch the short-term range formation for clues on the next impulse move’s direction.