The Liontown Resources Ltd (ASX: LTR) share price has delivered a lousy performance over the past year. However, the beaten-down lithium miner has been shown a jolt of enthusiasm recently, hinting that shareholders' luck could be changing.

A share price falling 56% in a year is already a poor starting point. When you layer in the S&P/ASX 200 Index (ASX: XJO) surging 18% in a year, suddenly, Liontown's recent showing is more of a meek purr than a roar — see the comparison above.

Yet, the Kathleen Valley project owner has been on the upswing these last 30 days. In a mere month, Liontown shares have risen 24% to 83 cents apiece. That's more than twice the overall market's average historical return for an entire year.

So, what's behind the revival?

Prices and progress

Lithium prices are higher today than a month ago — a rare event since November 2022.

Before getting too excited, the difference is modest. According to Trading Economics, a tonne of lithium carbonate fetches 75,000 Chinese yuan versus approximately 73,000 last month — less than 3% higher.

Still, it's an improvement over the recent declines. Whether it marks the bottom of the cycle remains anyone's guess. The president of energy storage at Albemarle Corporation (NYSE: ALB), Eric Norris, recently said:

I can't tell you if prices have bottomed, as they've been unpredictable. I will tell you that they are below marginal cash costs and well below incentive cash costs. A Western expansion, even a Chinese expansion, is now questionable at these price levels.

So, while the price of lithium is slightly higher, it remains below a profitable price to sustain production for many in the industry.

Speaking of production… On 30 September, Liontown announced the maiden shipment of spodumene concentrate from Kathleen Valley. The news, alongside the company's full-year results, helped lift the Liontown share price by 6% on the day.

Vote of confidence for Liontown share price

Rio Tinto Ltd (ASX: RIO) entered a definitive agreement with Arcadium Lithium (ASX: LTM) last Thursday to acquire the lithium producer. The deal values Arcadium at roughly US$6.7 billion based on the US$5.85 per share offer.

How does this relate to the Liontown Resources share price?

In a way, Rio Tinto's move signals optimism for the future of lithium. Why would the mining giant cough up $10 billion odd Australian dollarydoos if it didn't? Management teams usually don't make an investment of that scale on a whim.

Normal investors — like you and I — might be 'following the leader', so to speak, after Rio Tinto's big deal.

Surprisingly, the short interest in Liontown shares has only fallen 0.1% (10.1% to 10%) recently. Short sellers are clearly unconvinced that Rio Tinto has picked the bottom of the lithium rut, betting the Liontown share price will fall more.