The Lighter (LIT) token has staged a significant recovery, rallying approximately 15% in the last 24 hours to trade around $3.10, significantly outperforming the broader crypto market's modest 1.63% gain. This surge follows a steep decline of over 30% from its all-time high last week, with the altcoin finding strong support at the $2.50 level.
The rally is fueled by two primary catalysts: substantial whale accumulation and the official launch of a protocol treasury buyback program. On January 5, 2026, a major whale sold 52.1 WBTC (worth approximately $4.86 million) and deposited $3.36 million in USDC into the Lighter protocol to purchase 1,119,001 LIT tokens at an average price of $3.00. Shortly after, another whale followed suit, depositing $2.89 million USDC to buy 991,458 LIT at $2.92. In total, these two entities spent $6.25 million to acquire over 2 million LIT tokens, signaling strong institutional interest and absorbing selling pressure.
Concurrently, on January 6, 2026, the Lighter protocol confirmed the launch of its token buyback initiative. The program will channel all fees generated from its decentralized exchange (DEX) and future services into on-chain repurchases of LIT tokens. The protocol treasury currently holds $1.35 million in USDC earmarked for immediate market purchases. Projections suggest the program could repurchase up to 30 million LIT tokens, representing roughly 3% of the total supply, thereby reducing circulating supply and creating sustained buying pressure tied directly to protocol usage.
From a technical perspective, LIT has broken out of a consolidation range between $2.60 and $2.80. Trading volume has skyrocketed 78-79% to between $35 million and $155 million, indicating fresh capital inflows. The Relative Strength Index (RSI), which had surged to overbought levels near 90, has cooled to a healthier 60, suggesting room for further upside. Key support is now seen at the pivot point of $2.92, with resistance levels ahead at $3.18 and $3.60.
However, the market shows signs of distribution, with buyer-seller strength metrics indicating higher selling pressure as some earlier investors cash out on the rally. The sustainability of the bullish trend will depend on the continued execution of the buyback program, ongoing whale support, and the ability of buyers to absorb profit-taking pressure to maintain price above the crucial $3.00 level.
