Lido whales offload $10 million worth of LDO tokens - However, the token's woes extend beyond this massive sell-off
Title: Lido DAO's Troubles: Why the $1.20 Rejection and Exchange Deposits Could Drag LDO Lower
Hey there! Hope you're ready for a deep dive into the recent happenings of Lido DAO (LDO). The cryptocurrency's price has been on a rollercoaster ride, and we're here to unpack the reasons behind it.
In the last 48 hours, a walletlinked to DeFiance Capital has dropped 9.3 million LDO, worth about $10.1 million, into major exchanges like Binance, OKX, Bybit, and Gate.io. These large-scale inflows are often a clear signal of planned sell-offs, especially during price drops, sparking concerns of further downside pressure in the short term.
At the time of writing, LDO plummeted 10.37% in the past 24 hours, reaching $1.01. This steep drop, along with the exchange movement, has LDO's price on questionable ground.
Engagement drops and users disappear
Lido DAO's network engagement has been weak, with Daily Active Addresses hovering at 139 and transaction count slipping to just 72. This trend suggests that fewer users are interacting with the protocol, which often leads to reduced organic demand. Moreover, falling user metrics typically correlate with price stagnation or correction.
Adding fuel to the fire, the Price DAA Divergence stood at -6.55%, reinforcing the bearish outlook. This gap means the recent price action lacks user-driven strength, which often leads to an unstable rally and a higher risk of correction.
Buyers turn cautious, derivatives metrics plummet
LDO's MVRV Z-Score is at around -0.133, suggesting mild undervaluation. However, this level doesn't show strong accumulation pressure, leaving buyers hesitant. In previous cycles, deeper MVRV lows often triggered significant rebounds, but that doesn't seem to be the case this time around.
What's more, LDO's derivatives metrics show growing caution, with trading volume plunging 24.22%, falling to $172.36 million, and Open Interest declining 9.79% to $129.93 million. These steep reductions suggest traders are closing positions and avoiding new ones, which limits volatility and dampens upward momentum.
Can LDO withstand the sell pressure or plunge lower?
LDO failed to break resistance at $1.20. The price now hovers just above the key support at $0.90. If this support breaks, the next targets could lie near $0.74 and $0.57. The RSI stands at 41.80, suggesting weakening strength and soft momentum.
All signs point to the price dipping further in the coming days. Unless LDO reclaims momentum above $1.02 and defends the $0.90 support level, a further retracement towards $0.74 remains likely in the near term.
In conclusion, Lido DAO faces escalating short-term downside risks due to large exchange deposits and fading on-chain activity. The drop in daily user engagement, combined with bearish divergence and neutral MVRV levels, reflects waning investor confidence. Additionally, derivatives markets show declining volume and Open Interest, reinforcing the risk-off tone.
Stay tuned for more updates and analysis!
- In the midst of uncertainty surrounding Lido DAO's recent struggles, Cardano users might consider diversifying their portfolio by acquiring tokens from other DeFi projects, given the crypto market's volatile nature.
- As LDO hovers near key support levels, tech-savvy investors might find this an opportune time to revisit trading Cardano on various exchanges, eyeing potential undervalued assets that could yield future returns.
- In light of the digital finance industry's high volatility, business analysts and financial experts may want to keep a close watch on the crypto space, identifying trends and making strategic decisions with regards to Cardano investments.
- During this critical period for LDO, technology enthusiasts and blockchain advocates can engage in discussions and exchange insights about the market downturn and possible solutions for Cardano's growth. Collaboration and shared knowledge will be crucial in navigating the unpredictable world of cryptocurrencies.
