LDO, the native token of leading Ethereum staking service provider Lido DAO, has seen an 8% price increase over the past 24 hours. Trading volume has also increased by 58% during the review period, reflecting heightened activity surrounding the altcoin.
However, the past 24 hours have been marked by a significant decline in LDO's open interest. This indicates that some futures traders may be taking profits after the recent rise.
Lido's trading volume hits all-time high
LDO's increase over the past 24 hours has been driven by a notable rise in demand during this period. According to IntoTheBlock, 891 unique addresses completed at least one LDO transaction on Monday, marking the highest one-day count since February 2023.
Daily active address of LDO. Source: IntoTheBlock
When the increase in daily active addresses accompanies price increases, it signals rising network activity and user engagement. This indicates that the price recovery is driven by actual demand for the asset rather than speculative trading.
Notably, today, LDO's trading volume on cryptocurrency exchanges reached a total of $670 million. According to DefiLlama's data, this represents its all-time high since the ETH staking protocol was launched.
LDO trading volume. Source: DefiLlama
However, LDO's 8% increase has come with a significant drop in its open interest. According to Santiment's data, this figure stood at $52 million at the time of press, down 50% in the past 24 hours. This reflects an increase in profit-taking among futures traders of the token after the price surged.
Open interest tracks the total number of outstanding futures contracts or options contracts that have not been settled or closed. When it decreases during a bull market, traders who previously bought the asset have decided to exit their positions and take profits. As these positions are closed, the total number of outstanding contracts will decrease, even if the price continues to rise.
LDO Open Interest. Source: Santiment
LDO price prediction: The token may climb to multi-month highs
On the daily chart, LDO's 8% increase has pushed it above the descending channel, which it has traded in since January. This pattern forms when the price of an asset trades between two downward-sloping trend lines, indicating a downtrend.
When the price breaks above the upper trend line of the descending channel, it signals a potential change in market sentiment, indicating a reversal of the downtrend. This breakout suggests increasing momentum, as buyers may gain control and push prices higher.
LDO price analysis. Source: TradingView
If buying pressure for LDO strengthens, its price may rise to $2.09, a level last reached in August. On the other hand, if selling pressure increases, LDO's price will reduce recent gains and fall to $1.08 if the support level of $1.56 cannot hold.