Cointelegraph Team
Cointelegraph
Lido DAO (LDO) has declined by more than 40% in the last 30 days with more room to fall in the coming days amid a potential sell-the-news event, such as the Merge.
Lido DAO Ether deposits surge 160% in 2022
Lido DAO is Ethereum’s biggest staking service, having deposited over 4.14 million of the blockchain’s native asset, Ether (ETH), into the Ethereum 2.0 smart contract on behalf of its users, according to the latest data.
ETH 2.0 total value staked by provider. Source: Glassnode
In comparison, Lido DAO’s total staked amount was around 1.6 million ETH at the beginning of this year. The boom reflects a growing demand for Lido DAO services ahead of Ethereum’s scheduled transition from proof-of-work (PoW) to proof-of-stake (PoS) via the Merge on Sep. 15.
LDO, a governance token in the Lido DAO ecosystem, has also undergone an unprecedented price rally in recent months, up more than 350% after bottoming out at $0.39 in June.
Still, the token’s sharp correction in the past month raises the possibility of an extended downtrend now that the pre-Merge hype is nearing its end. In addition, a technical setup also alerts about a potential price decline ahead.
LDO hints at descending triangle reversal
The latest selling period in the Lido DAO market started after LDO topped at $3.10 on Aug. 13. This downtrend has painted a pattern that appears to be a descending triangle.
Descending triangles that form at the top suggest bullish exhaustion. Theoretically, a descending triangle breakdown below the lower trendline could crash the price to the level at length equal to the maximum triangle height.
LDO now tests the triangle’s lower trendline area, at around $1.79-$1.82, as support. The token could drop toward $1.17 if it breaks below the support level while accompanying a rise in trading volumes. In other words, a 35% drop from current price levels.
LDO/USD daily price chart featuring descending triangle breakdown setup. Source: TradingView
Conversely, a rebound from the $1.79-182 support area could have LDO test the descending triangle’s upper trendline at around $2.10 as resistance.
Also, a decisive breakout above the upper trendline would risk invalidating the bearish setup discussed above.
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.
Recommended Content
Editors’ Picks
Ripple on-chain metrics show bullish signs amidst legal struggle with SEC, XRP eyes recovery
Ripple made a comeback above $0.48 on Tuesday and hovers above that level in Wednesday’s European session. Ripple on-chain metrics such as transaction volume and Network Realized Profit/Loss have turned bullish, supporting a recovery in the altcoin.
Bitcoin price falls amidst German government transfers, miners activity
Bitcoin (BTC) extends correction on Wednesday and hovers around $61,000 after finding resistance near the $64,000 level on Monday. Recent on-chain data indicates heightened selling activity from Bitcoin miners early in the week.
Crypto Today: Bitcoin erases gains from end of June, Ethereum declines while Ripple holds
Bitcoin wipes out gains from the last week of June and falls below $60,000 on Wednesday. Ethereum and top altcoins ranked by market capitalization erased gains as the inflation outlook worsened. Ripple holds on to recent gains and hovers above $0.48 on Wednesday.
Three reasons why altcoins could shake off losses this week
On-chain data from Santiment shows that altcoins are currently in the opportunity zone, or generating buy signals. The top three altcoins in the buy zone are Basic Attention Token (BAT), Chromia (CHR), and Highstreet (HIGH), per Santiment.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.