Lido Finance: Decline in TVL, re-emergence of bears, and everything in between

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  • Due to the fall in prices of some native coins, Lido’s TVL declined in the last week.
  • The buy­ing pres­sure for LDO has declined sig­nif­i­cant­ly, and a price draw­back might be on the horizon.

Lido Finance [LDO], a promi­nent liq­uid stak­ing pro­to­col, expe­ri­enced a drop in its Total Val­ue Locked (TVL) in the past week as a result of a decrease in the val­ues of the native coins with­in its oper­at­ing net­works, includ­ing Ethereum [ETH], Poly­gon [MATIC], Solana [SOL], Polka­dot [DOT], and Kusama [KSM].


Read Lido’s [LDO] Price Pre­dic­tion 2023–24


Accord­ing to data from cryp­tocur­ren­cy price track­er Coin­Mar­ket­Cap, ETH’s price fell 4% in the last sev­en days. Like­wise, the prices of SOL, DOT, and KSM fell by 3%, 6%, and 5%, respectively.

At press time, Lido’s TVL was $8.01 bil­lion, hav­ing declined by 3% in the last week.

Source: DefiLla­ma

The decline in TVL on Lido occurred despite the launch of a new ETH/LDO fac­to­ry pool, which gained over $16 mil­lion in the last week. 

Trouble in Lido’s paradise?

It is no longer news that Lido’s dom­i­nance of the liq­uid stak­ing mar­ket has come under threat because of the rise in activ­i­ty on cen­tral­ized cryp­to exchange Coinbase. 

Accord­ing to Del­phi Dig­i­tal, Lido’s mar­ket share, which was 85% at the start of 2022, has decreased to 73% fol­low­ing Coinbase’s entry into the liq­uid stak­ing mar­ket in June 2022.

Nar­row­ing it down to the ETH stak­ing mar­ket, data from Dune Ana­lyt­ics revealed a per­sis­tent drop in Lido’s share of that ver­ti­cal. As of this writ­ing, Lido only con­trolled 29% of the mar­ket. On May 22, this stood at 32%. 

Source: Dune Analytics

Your LDO gains might be in trouble

LDO’s price, which has risen 109% in the past month, could expe­ri­ence a down­turn as analy­sis of its dai­ly chart sug­gests the start of a bear mar­ket cycle.

An assess­ment of the alt’s mov­ing aver­age convergence/divergence (MACD) revealed an inter­sec­tion of the MACD line with the trend line in a down­trend on 27 Jan­u­ary. The indi­ca­tor has since been marked by red his­togram bars. In fact, LDO’s price has since dropped by 9%, per CoinMarketCap.

When an asset’s MACD line cross­es the trend line in a down­trend, it often sig­nals a poten­tial trend rever­sal or a change in momen­tum. As a result, it is con­sid­ered a bear­ish crossover, and traders often inter­pret it as a sell signal.


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Also, key momen­tum indi­ca­tors such as the Rel­a­tive Strength Index (RSI) and the Mon­ey Flow Index (MFI) were in down­trends. For exam­ple, at press time, LDO’s RSI was 52, while its MFI had fall­en below the neu­tral line to be pegged at 37.24.

These showed a per­sis­tent drop in LDO accu­mu­la­tion, usu­al­ly fol­lowed by a price reversal. 

Source: LDO/USDT on TradingView



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