October 13th 2026, 8:00 PM
Lighter LIT Plunges 12% Amid Panic Liquidations and Bearish Sentiment
Key Summary
Lighter's price dropped 12% to $3.22 after $2.9M in long liquidations and increased trading volume, driven by panic selling and bearish market sentiment, with the altcoin's spot investors buying at a discount, but demand still inadequate to support the market, and indicators suggesting intense bearish pressure and potential drop below $3.2.
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Market Analysis
Lighter faced rejection at $3.99 and fell 12% to a low of $3.22 driven amid panic selling. The altcoin's price drop triggered a wave of long liquidations. According to CoinGlass data, $2.9 million in long positions were liquidated over the past 24 hours. Usually, when longs are flushed out, it raises selling pressure. Higher selling from here pushes prices lower, raising the liquidation risk even higher. The increased liquidation risk pushed many traders to exit their positions.Market Structure
Over the same period, Lighter saw $87.5 million in Futures outflows, compared to $77.7 million in inflows. As a result, Futures Netflow plummeted 371% to -$9.7 million. Such a drop in netflow suggested that more capital flowed out of the Futures market than entered it, potentially reflecting traders closing positions rather than opening new ones or expanding existing positions.Spot Investors
Interestingly, it appears that Lighter's Spot investors were incentivized by the market slip to buy at a discount. On the 12th of October, Spot netflow plunged to -$5 million. The same trend persisted at press time, with the netflow holding around -$720k. A negative netflow during the market retracement suggested that more tokens were leaving exchanges than entering them, potentially indicating that investors were moving tokens off exchanges.Market Outlook
Although buyers have remained active on the Spot, the demand arising from here seems inadequate. As such, the market structure still leans heavily bearish. The Relative Strength Index (RSI) indicator has dropped to 39 at press time, suggesting that sellers are stronger and have substantial control of the market. Likewise, the altcoin sits below its short-term moving averages, indicating intense bearish pressure. Taken together, these indicators suggest that the trend is likely to persist. Therefore, if these conditions continue, Lighter could drop below $3.2 again and potentially breach the $3 support level. But all is not lost, especially with Spot demand holding steady. If buyers continue to hold their ground, LIT could defend $3 and target $4, with its 50-day moving average at $4.1 acting as key resistance.#LIT#US#Crypto#Altcoin