This is partly true in the sense they bought in due to the...

This is partly true in the sense they bought in due to the lithium news.
However, I believe the reason for the sell off was because of the negative uncertainty surrouding the new Covid variant on the stock market.
Due to this there was a mini crash on Friday and then on Monday morning before price recovered again in the Monday afternoon.
In my opinion a lot of traders lost a lot of money in this period with many having margin loans, so they have to sell other shares to recoup these losses. MLS had an excess demands above 800millions at 0.002, which is also the price many traders would have entered. This is a very liquid way to recoup losses without making a lot of losses (unless they bought in at 0.003).
Other traders would also pull their money out of the stockmarket and shift them to other securities or gold (gold price went up again these couple of days) due to the fears.

However, the news seems to be not that bad regarding Omicron variant and its impact on the market, which is why we see the stockmarket recovering again. I think these articles highlight the market reaction to Omicron correctly looking at the current stockmarket positve gains:

https://www.barrons.com/articles/stocks-omicron-outlook-liquidity-51638212050
https://www.theguardian.com/business/2021/nov/29/markets-have-got-it-about-right-on-omicron-so-far-covid-larry-elliott
https://www.cbsnews.com/news/dow-jones-recovers-monday-covid-omicron-variant/

On Monday afternoon there was again an increase demand for MLS which continues today.

I also assumed the shares have changed hands to traders who are willing to hold the shares longer than those who were spooked by 1 red market day. It's a bargain and an unexpected fill for those wanting an entry at 0.002. With more news regarding lithium drillings, this price entry at this huge volume proportion may not happen again so well done for holding the buy order.