Lighter (LIT) Token Surges 18.3% as Buyback Program Reduces Supply and Attracts Whale Investment

• Lighter initiated a buyback program using protocol fees on January 6, 2026, repurchasing 180,733 LIT tokens valued at $564,609.
• Whale activity, including a $4 million USDC deposit for 1.28 million LIT tokens, signals strong market confidence and potential price growth.
• The price of LIT surged 18.3% over 24 hours to $3.11, supported by improved accumulation signals from the Chaikin Money Flow indicator.

Lighter’s LIT token has seen a significant price surge following the launch of its buyback program. The protocol has repurchased over 180,000 LIT tokens using revenue from trading fees, signaling a commitment to token price stability and long-term value creation. This initiative, which aligns with statements made by the team in late December, aims to reduce the circulating supply and stabilize the token’s value.

Whale activity has played a key role in the recent price action. A large investor deposited $4 million in USDC to acquire 1.28 million LIT tokens at $2.96, with additional funds still available for further purchases. This accumulation suggests strong conviction in the token’s potential and could continue to drive upward price pressure. Another whale wallet used $3.8 million in USDC to purchase 1.28 million LIT tokens, with remaining liquidity for additional acquisitions.

Technical indicators provide further support for the recent rally. The Chaikin Money Flow shows strengthening inflows, suggesting that buying activity is more aligned with long-term accumulation than short-term speculation.

The Money Flow Index is also above the neutral threshold, indicating sustained buying pressure without reaching overbought territory. While the price remains below $3.19—a key resistance level— breaking above this threshold could confirm a bullish trend reversal.

Is the LIT Price Rally Sustainable?

The recent surge in LIT has raised questions about whether the momentum can continue. On January 1, the token formed a bearish divergence, with rising prices accompanied by outflows. However, conditions have since improved, with declining outflows and rising prices indicating stronger accumulation.

While the rally is supported by strong on-chain metrics, downside risks persist. A return of selling pressure could push LIT below $2.97 and potentially lead to a slide toward $2.77. The Money Flow Index remains below the overbought threshold of 80.0, suggesting that buying pressure has not yet saturated the market.

What Drives Investor Confidence in Lighter’s Buyback Strategy?

The buyback program is part of a broader token economics strategy outlined by the Lighter team. The program aims to reinvest in the token ecosystem and align long-term incentives with token holders. The Lighter treasury has allocated 50% of the total supply to the ecosystem, with future revenue from trading fees and other products expected to support further buybacks.

Transparency in treasury activities has reinforced investor confidence. The public treasury account is openly accessible, allowing investors to track real-time developments in buyback activity and overall liquidity. This level of transparency has positioned Lighter as a trusted protocol, with analysts and investors closely monitoring on-chain activity for signs of sustained buyback effectiveness.

What Role Do Whales Play in LIT’s Price Trajectory?

Whale activity has been a key driver of LIT’s price action. Large investors have been actively accumulating tokens, with one wallet now holding 13.2 million LIT tokens valued at nearly $40 million. This level of institutional interest suggests that LIT is being viewed as a long-term investment rather than a short-term speculative asset.

Whale deposits have totaled $10 million in USDC to acquire 3.44 million LIT tokens, further reinforcing the idea that institutional and high-net-worth investors are confident in the token’s future value. These actions could contribute to continued price appreciation, especially with the token’s imminent listing on Coinbase, which is expected to increase liquidity and attract a broader range of investors.

Final Thoughts

Lighter’s buyback program has contributed to a 18.3% price increase for LIT in 24 hours, driven by whale activity and strong on-chain accumulation signals. The initiative aligns with broader DeFi strategies to stabilize token value and reward long-term holders. While the rally raises the possibility of a short-term trend reversal, continued buying pressure and transparency in treasury activities will be critical for sustaining momentum and attracting further institutional investment.