Lido Dao Price Forecast: LDO price flirting with support of this rally
|- Lido Dao price trades flat as markets try to assess the fallout of crypto broker Genesis.
- LDO sees headwinds mounting after an already volatile week with plenty of negative central bank comments.
- A break lower could go as far as $1.60 with 20% losses at hand.
Lido Dao (LDO) price is set to close its first negative week for 2023 after markets got rattled by a wave of central bank speakers banging the same drum as in 2022. With the positive mood and belief of a Goldilocks scenario dampening, the default overnight from crypto broker Genesis could not have come at a worse time. The fact that negotiations have been ongoing since November makes this even worse and dents the image of cryptocurrencies again.
LDO set to drop as risk mounts
Lido Dao price looks set to pare back quite some gains from its rally that jump-started at the beginning of this year. The fact that the rally got off to a quick start should not come as a surprise as the first two weeks of 2023 only had some second-tier data and no central bankers coming out with thoughtful comments on what was going on in the markets. With now another default overnight, after the FTX debacle, this one could be the sore spot that hits Wall Street with a write on a few banks’ balance sheets.
LDO could get punished in an overall sell-off in cryptocurrencies as this default again dents the image of the sector and the asset class. Only six months after Terra’s LUNA nuclear bomb, followed by the FTX plunge, this default could hit the Gemini vehicle from the Winklevoss twins, who had backing from several US commercial banks. Expect the punishment trade for the sector that Lido Dao price breaks the green ascending trend line. If the pennant formation is being taken out as well, the 200-day Simple Moving Average (SMA) near $1.60 looks to be the best candidate for now to support the decline.
LDO/USD daily chart
With the double support from the green ascending trend line and the pennant, it could be that the support is enough to withstand these headwinds. All in all, the central bankers have not said anything special or new. The fact that the negotiations around Genesis were already underway last year means a risk premium has already been priced in. In that scenario, LDO could jump higher and test $2.40 for a breakout trade out of the pennant and test $2.60 yet again.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.