The recent market movement of LIT is quite intense, dropping straight from the sky. It plunged over 10% pre-market, and now the price is hovering around $2.75, repeatedly testing support. Many traders are starting to feel nervous. Let’s break down what factors are at play.

**What the news says**

The Lighter airdrop has begun distribution, and users don’t need to claim manually—the tokens are directly credited to their accounts. Theoretically, this is good news, but the market’s reaction has been opposite—LIT sharply dropped from above $3 down to around $2.7. This is quite interesting—why does good news lead to selling pressure?

The reason isn’t complicated. Many participants are motivated by the mechanism of exchanging points for tokens. Once the 20x LIT arrives, they want to cash out immediately to lock in profits. Especially those who participated early at low prices, their profit-taking desire is strongest, leading to a large sell-off pressure. This “good news turns bad” scenario repeats in the crypto space, reflecting how fragile market sentiment can be—any slight disturbance prompts quick exits.

In the short term, the concentrated selling pressure caused by the airdrop realization cannot be ignored. Market sentiment is bearish, and it’s necessary to watch whether a stampede might occur.

**Technical analysis**

The 4-hour candlestick chart tells a clearer story. After a volume breakout below the support zone of $3.0–$3.6, a technical breakdown has been confirmed. Currently, the price is weakly oscillating in the $2.42–$2.75 range, with the MACD showing a death cross diverging below the zero line, and RSI approaching oversold levels.

Details on the order book are also concerning—there’s a clear accumulation of sell orders, with a dense resistance zone above $2.43. If the price cannot regain above $2.75 (the neckline), the downtrend will continue. The next key support levels to watch are in the $2.20–$2.30 range. Essentially, the moving averages are already showing a bearish alignment, and if the rebound momentum is insufficient, further downside risk remains.

**What to expect next**

From my perspective, this sharp decline seems more like a concentrated release of emotions. The airdrop has indeed caused significant selling pressure in the short term, but from another angle, it also indicates that the number of real users and holders is expanding, and the ecosystem’s activity is increasing.

The current price is approaching a critical support level. If the $2.4–$2.42 zone can hold, after the panic selling clears out, there might be an oversold rebound opportunity. In the short term, I don’t recommend blindly shorting; it’s better to wait for signs of stabilization. However, this depends on the price not breaking down below $2.4 with volume. Once that level is breached, further downside risks should be anticipated.