2026-01-12 19:24:05

LIT's recent decline doesn't seem to be a simple technical correction. The main players took the opportunity to dump after the positive news was exhausted, coupled with a clear cooling of the LayerZero ecosystem's heat, leading to increased selling pressure.

What stands out is the performance of the derivatives market. While the token price fell sharply, open interest in derivatives actually surged, and the total value of open positions increased far more than the number of positions—what does this indicate? Major players are aggressively leveraging up to short during the decline. As the native token of LayerZero, LIT originally had a definite demand in the cross-chain interoperability sector, but now the token unlock wave of leading projects within the ecosystem has become a Damocles sword hanging over the market. The proportion of large traders' short positions continues to rise, clearly preemptively digesting this wave of negative news.

The technical aspect further explains the situation. On the 1-hour chart, the price broke below the key support at 2.20, with no signs of volume shrinking during active selling. The MACD also formed a death cross below the zero line with no signs of reversal. All these point in one direction—the downtrend has not yet fully played out.

Another detail is that although LayerZero's cross-chain transaction volume is still growing, the tokenomics of LIT currently lack a burning mechanism, so circulating supply pressure remains. Against this backdrop, the price is likely to test support around the integer level of 2.0. If you want to buy the dip now, to be blunt, you're essentially catching a flying knife.

LIT-10,72%

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rugdoc.eth

· 1h ago

The main force's move this time is really fierce, smashing the market + leveraging short positions, retail investors just become the chives. The unlocking tide is hanging over, with such heavy circulating supply pressure, still trying to buy the dip? Jumping into the fire is suicidal. Even after breaking below 2.2, there's no decrease in volume, indicating some people are still bleeding. Keep pushing down to 2.0. LayerZero ecosystem's popularity has cooled down, so why would LIT rebound? Unless there's a black swan positive news. I honestly think that now buying the dip is just gambling, betting on when the big players will stop adding shorts, a pure probability game.

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TokenSleuth

· 16h ago

The main force dumping this pattern, it's always played out like this Thinking of catching the falling knife if it drops below 2.20? Let's wait and see, the big players' short positions are so high Once the unlocking wave arrives, the ecosystem's heat is gone, this is the real trap Contract positions surge but the numbers haven't kept up? A classic leveraged short signal LIT is now a hot potato, with no burn mechanism and circulation pressure standing there Whether 2.0 can hold is uncertain, I'm still on the sidelines Ecosystem project tokens are unlocking wave after wave, who dares to catch this flying knife...

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MetaverseVagrant

· 16h ago

Damn, it's the same old trick again. When the big players dump, we have to catch the falling knives. The surge in contract short positions was obvious early on. Catching the falling knives is really catching the falling knives. 2.0 might not even be the bottom. LIT probably has to fall further this time. Without ecosystem enthusiasm, the coin price is pointless. When the unlocking wave arrives, big investors have already left. We're still dreaming here. With such obvious technical breakdowns, you still want to buy the dip? That's just wishful thinking.

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WhaleWatcher

· 16h ago

The surge in main short positions is indeed a bit frightening, and it seems the 2.0 threshold will have to be broken. The "flying knife" metaphor is excellent; it's definitely not the time to bottom fish. The unlocking tide is a deep pit, and once the ecosystem heat cools down, everything will be exposed. There's no sign of a MACD death cross turning upward; short-term looks bearish. The circulating supply pressure is there, making a rebound difficult. To put it simply, it's still the main players collecting chips; retail investors should not blindly follow the trend.

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TokenTaxonomist

· 16h ago

per my analysis, the tokenomics taxonomy here is just... taxonomically incorrect. no burn mechanism yet? that's an evolutionary dead-end waiting to happen. data suggests otherwise than what the hype merchants are selling.

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UnluckyLemur

· 16h ago

You're throwing knives again, I really can't hold it anymore. LIT this broken thing, the main force dumps and then runs, whoever takes it will be unlucky. The trend of unlocking is here, and you still dare to copy? I don't believe you can withstand it. Whether 2.0 can hold on or not, let's see later. Anyway, I won't touch it anymore. The leeks whose contracts got liquidated must be feeling really bad right now. Serves them right.

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