Lighter hits new ATL at $0.91 – How low can LIT fall from here?

With the altcoin on a strong decline, short position holders have seen their profit margin skyrocket. Onchain Lens reported that a whale holding a 2x short position now sits on a floating profit of $2.07 million.

The rising profit margin for short sellers reflected the prevailing intense downward momentum.

Lighter faces intense selling pressure

Source: TradingView

Sellers have dominated the market over the past seven days, with their dominance peaking at 4 million while demand continued to decline.

Source: CoinGlass

Traditionally, weakened demand and strengthened sell-side activity have tended to accelerate downward momentum, leading to lower prices. Thus, the prevailing market conditions left LIT exposed to potential further downside risk.

Is there further downside risk？

Lighter breached $1 support, as sellers became increasingly aggressive. With sell pressure intensifying, the momentum to the downside further strengthened.

As a result, the Relative Strength Index (RSI) dropped to 32, hitting nearly oversold territory. RSI dropped consecutively from 55 to 32, reflecting seller intensity.

Source: TradingView

The momentum further strengthened as the altcoin continued to hold below the MA and EMA, both of which sat above $1. These two momentum indicators signaled the likelihood of trend continuation, holding the prevailing market conditions constant.

Therefore, if the trend persists, LIT will most likely breach the $0.9 support and decline towards $0.85. To see a trend reversal, LIT needs not only to hold $0.9 but reclaim $1.

In doing so, the upside momentum will be strong enough to enable significant gains.