Lido DAO (LDO) Price Rebounds to Three-Week High Amidst Growing Demand for Liquid Staking Services

Lido DAO (LDO) Price Rebounds to Three-Week High Amidst Growing Demand for Liquid Staking Services

Lido DAO’s price has surged by 40% to reach $2.21, its highest in three weeks, after hitting a local low of $1.57 four days ago. Although the crypto market as a whole has risen by only 4.5% since May 12, LDO has outperformed other top-ranking crypto assets like Bitcoin and Ether. But what are the reasons behind Lido DAO’s impressive performance?

The first factor driving up LDO’s price is the positive inflows into Ethereum’s proof-of-stake (PoS) contract in recent days. Lido DAO is an Ethereum liquid staking platform that enables users to pool their funds to become validators on Ethereum without depositing at least 32 ETH. As a result of Ethereum’s network upgrade in April, which supports reward withdrawals from its staking contract, its PoS contract has witnessed a consistent recovery, with over 20 million ETH as of May 16. This growing demand for liquid staking services like Lido DAO is likely boosting the price of its governance token, LDO.

The second factor is the launch of “Lido v2” on May 15, which allows Ether stakers to burn their stETH and exit the protocol at a 1:1 ratio. Since the upgrade, LDO’s price has climbed by 20%, half of its 40% rebound so far. Lido DAO whales have also supported LDO’s upside move in the days leading up to the Lido v2 launch.

The third factor is the technical analysis of LDO’s price movement, which shows a falling wedge setup, a bullish reversal pattern. LDO’s 40% bounce started near the lower trendline of the pattern, and each rebound has taken its price to the wedge’s upper trendline. With the price treading around the upper trendline again, LDO could enter a breakout stage or pull back to retest the lower trendline.

Implications of LDO’s Breakout Scenario

If LDO enters a breakout scenario, its price could rally toward $3.35 by June 2023, up around 50% from current price levels. This target appears after adding the maximum wedge height to the potential breakout point near $2.70.

Conversely, if LDO pulls back to retest the lower trendline, its price could fall near $1.56 by June 2023, down 30% from current price levels. This level has served as support and resistance in the past.

Lido DAO’s price surge can be attributed to the growing demand for liquid staking services, the launch of Lido v2, and the technical analysis of its price movement. LDO’s breakout scenario could lead to a bullish rally, while a pullback scenario could result in a price decline.


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