Lido Dao price to tank 25% as Fed’s preferred inflation measure ticks higher

Lido Dao price drops 4% on the back of rising PCE deflator.
LDO set to be revalued lower as Fed will look to hike interest rates.
With tighter financial conditions, risk assets are bound to sell off.

Lido Dao (LDO) price is tanking as traders are getting a gut punch from the US Personal Consumption Expenditures (PCE) index that arrived on Friday. The PCE is the preferred tool for the Fed to assess how inflation is doing. With an upward beat in every metric in January and an upward revision for the prior numbers, inflation appears quite sticky.

Lido Dao price drops under the weight of sticky inflation

Lido Dao price is sliding lower with equities and other cryptocurrencies as the US Dollar gains strength. The move comes after PCE numbers on Friday that point to rising prices and wages across the board in the United States. This means that the Federal Reserve will likely hike interest rates by 50 basis points in March.

LDO and other altcoins do not thrive well under tight financial conditions. As the Fed is set to crank up their monetary policy more than expected, LDO should follow a wild ride lower. Expect equities and LDO to tank further in the coming days with $2.20 as the best candidate to slow down the decline. $2 would then become the floor to underpin Lido Dao price action.

LDO/USD daily chart

The PCE deflator is just one economic data point, and other data elements in the coming weeks could instead confirm that inflation is still slowing down. If this sudden pickup in inflation is short-lived, expect a small turnaround in LDO with a pop back above $3. Depending on the Fed meeting in March, a breakout trade above $3.37 could materialise if the central bank slowly turns toward a dovish stance.

Share: Cryptos feed

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.