LIGHT has proven to be one of the strongest performers in the past 24 hours. The token’s price action saw gains of 13% as traders increased their exposure to the market.
Interestingly, the rally was also accompanied by a sharp increase in derivatives activity, suggesting that this move may attract more than just interest in the spot market.
The question now is whether the current momentum has enough strength to continue or not.
Do the network derivative metrics support the rally?
The rally seemed to find support in the derivatives market data. According to long/short ratio data, almost 68% of open positions appeared to be moving toward the bulls. In other words, most traders are still betting on the rally continuing.
This is important because strong rallies often start to lose steam when traders start to reduce their exposure. So far there is little evidence for this. Instead, market participants are adding long positions even after the recent price surge – a sign that confidence remains intact.
That shift was also accompanied by a significant increase in Open Interest. In fact, the network’s Open Interest also recorded a daily increase of 12% to 12.4 million.
In itself, an increase in Open Interest does not indicate any direction. However, when this is accompanied by rising prices and a market that has been dominated for a long time, it often indicates that new capital is coming in on the bull side.
A build-up of momentum?
The recent rise has also strengthened the short-term structure of the token.
Instead of fading after the initial move, buyers have continued to intervene, allowing the price to retain much of its gains. Such behavior generally indicates trust among market participants.
At the time of writing, the token was trading above the major exponential moving averages, with the next resistance at $0.18 being the next target for the buyers.
Liquidity remains the next goal
With sentiment becoming increasingly bullish, attention is now shifting to above-press-time liquidity.
In fact, the network liquidation data highlighted the greater presence of several liquidity clusters above the trading price level at the time of writing. If buyer dominance remains intact, LIGHT could continue to advance into those higher liquidity zones.
What comes next?
Collectively, these factors seemed to indicate that momentum remains constructive. Whether that momentum is enough to trigger a full liquidity clearing will likely depend on whether buyers continue to increase their exposure in the coming sessions.
Final summary
- LIGHT’s long positions now represent 68% of the market exposure, underscoring the growing bullish conviction among traders.
- The increase in Open Interest, in addition to the price gains, indicated the arrival of new capital on the market.