- Lido’s token LDO sinks to the $1.5 range, undoing all of its Q2 gains amid a bear-dominated market.
- Mixed on-chain indicators could signal an upcoming shift in market dynamics, depending on Bitcoin’s movements.
A Shattered Support Level Amplifies Bearish Momentum
Lido’s native token, LDO, has witnessed a precipitous decline, falling to a nadir of $1.5 and erasing the gains it had painstakingly accumulated in Q2. This descent doesn’t come in isolation; it appears to be a part of the broader downtrend led by Bitcoin, which has enabled sellers to apply maximized downward pressure on the token.
The $1.76 support level, once a bastion that bulls held onto tenaciously for nearly a month, finally capitulated under the sheer weight of selling pressure. This significant breakdown was marked by two major price drops on August 15 (7.9%) and August 24 (9.5%). These sharp declines provide sellers with an opportunity to target the previous January low of $1.25.
Mixed On-Chain Metrics: Reading the Tea Leaves
In a declining market, several indicators can provide invaluable insights. One such metric is the Relative Strength Index (RSI), which is currently verging on the oversold zone, thus reflecting the dominance of the bears. Similarly, the On Balance Volume (OBV) indicates a decrease and subsequent flatline, suggesting a tapering interest in LDO accumulation.
However, another compelling facet is the evolving Open Interest (OI). A decrease in OI during a price downtrend usually solidifies the bearish outlook. Yet, in LDO’s case, while the OI decreased, the spot Cumulative Volume Delta (CVD) rose. This apparent contradiction could signal latent demand for LDO and could potentially serve as a precursor to a price rebound, especially if bolstered by a Bitcoin market recovery.
Consequently, traders should remain vigilant for any signs of a bullish reversal in Bitcoin as a leading indicator for potential LDO price action. The mixed signals emanating from Lido’s on-chain metrics present a complex picture, and whether the bulls can regain the upper hand depends significantly on macroeconomic factors, including Bitcoin’s next moves.