LIT's downward spiral accelerates with 20% plunge...

Lighter [$LIT] suffered a sharp correction after rejecting the $1.80 resistance level, with the token falling more than 20% within 24 hours as selling activity intensified across the market.

The decline pushed $LIT to around $1.38, erasing a large portion of the rally that had carried the asset to multi-month highs only days earlier. Trading activity also weakened during the sell-off, with volume dropping 17.58% to $128.6 million.

This decline in both price and volume suggested that traders had reduced participation after the rejection.

However, $LIT continued holding above a key breakout region, keeping attention focused on whether buyers could stabilize the market before another wave of selling emerged.

Why are Binance traders still bullish?

Despite the severe correction, Binance’s top traders maintained a notably bullish stance.

CoinGlass analytics showed that 68.75% of top trader accounts remained long, while only 31.25% held short positions. The Long/Short Ratio stood at 2.20, highlighting a significant imbalance in favor of bullish bets.

Such positioning suggested that experienced traders had viewed the recent decline as a correction rather than the beginning of a prolonged downtrend.

However, the concentration of long exposure also increased risk. If $LIT failed to hold key support levels, additional downside pressure could emerge from long liquidations.

Nevertheless, the persistence of bullish positioning indicated that a large segment of traders continued expecting a recovery despite the aggressive sell-off.

Source: CoinGlass

Can $LIT defend its breakout structure?

Following its rejection near $1.80, $LIT retraced toward the $1.38 region, which aligned with a key breakout area from the recent rally. This zone now represented the first major support level that buyers needed to defend.

A sustained hold above $1.38 would keep the broader recovery structure intact and could encourage fresh buying interest.

However, a breakdown below this area would expose the market to a deeper retracement toward the $1.12 support level highlighted on the chart.

Looking at the indicator structure, MACD remained in bullish territory despite the pullback. The MACD line stayed above the signal line, while both indicators remained above the zero line.

Although the histogram had begun shrinking, bullish conditions had not completely disappeared. Therefore, buyers still retained an opportunity to regain control if support continued holding.

Source: TradingView

Liquidity wall sits above the current price

Liquidation data revealed a dense concentration of liquidity between $1.55 and $1.60. Several large liquidation clusters had formed within this range, making it one of the most attractive short-term targets if buyers regained strength.

Markets frequently gravitate toward areas containing substantial leverage because those zones provide liquidity for larger participants. As a result, any sustained recovery from current levels could pull $LIT toward this region.

On the downside, liquidity appeared comparatively thinner below current prices, reducing the immediate attraction of lower levels.

However, failure to defend the $1.38 support area could still trigger another wave of selling pressure before buyers attempted to re-enter the market.

Source: CoinGlass

Is $LIT preparing for a rebound toward $1.60?

Current conditions suggested that a recovery remained possible despite the sharp decline. Binance traders had continued favoring long positions, MACD had remained bullish, and $LIT had still traded above a critical breakout zone.

If buyers successfully defended the $1.38 support area, price could rebound toward the $1.55–$1.60 liquidity cluster.

However, losing that support would weaken the bullish case and could shift attention toward lower support levels instead.

Final Summary

Binance traders remain heavily bullish despite $LIT’s sharp market correction.

$LIT continues holding breakout support, keeping recovery hopes toward $1.60 alive.