Ethereum-based liquid staking solution Lido has seen Total Value Locked (TVL) rise 25% in the last 30 days. As a result, Lido's TVL is on track to hit its record $40 billion hit in March.
Despite the increase in this metric, Lido DAO Token (LDO), the native cryptocurrency of the Decentralized Finance (DeFi) project, may struggle to continue appreciating. Here’s why.
Confidence in Lido staking returns to March peaks
As of November, Lido’s TLV was $24.60 billion. TVL measures the total value of assets locked or staked on a blockchain. As TVL increases, an influx of assets is being locked on a platform.
This growth often improves liquidity, increases user confidence, and can lead to higher demand for the platform’s native token. Conversely, a decrease in TVL suggests an increase in asset withdrawals, indicating less investor confidence.
According to DeFiLlama, the protocol’s TVL currently stands at $38.57 billion, less than $2 billion away from its all-time high. This growth suggests renewed confidence in Lido’s ability to deliver competitive yields.
Lido Total Value Blocked. Source: DeFiLlama
LDO rises 10%, but faces resistance at US$ 2.32
This increase is in line with a 10% growth in the LDO price in 24 hours. The rally can be attributed to the Grayscale Lido DAO Trust, which indicates that institutional investors can now have exposure to the cryptocurrency.
However, the In/Out of Money Around Price (IOMAP) revealed that it may be challenging for the altcoin’s price to climb towards the $3 mark. This is due to significant resistance around $2.32.
To put this into context, IOMAP classifies addresses based on those that are in profit, those that are in loss, and those that are at breakeven. When there is a higher volume of tokens in profit, this indicates resistance, while a large cluster of tokens in loss indicates resistance.
Lido In/Out of Money Around Price. Fonte: IntoTheBlock
As seen above, around 1,400 addresses hold 124.43 million and have accumulated at an average price of $2.32. This volume is higher than those purchased between $1.89 and $2.22, indicating strong resistance around the current value. Given this situation, LDO could experience a notable pullback.
LDO Price Prediction: Altcoin Eyes Lower Levels
From a technical perspective, the Awesome Oscillator (AO) on the daily chart is positive. However, the AO, which measures momentum, has shown red histogram bars. The red bars on the AO indicate that the momentum around the LDO is waning.
Like the AO, the Moving Average Convergence Divergence (MACD) also supports a bearish outlook. Typically, when the MACD is positive, it means that momentum is bullish.
However, in this case, the negative reading suggests that the LDO price could fall to $1.65. This value is where the 61.8% Fibonacci retracement indicator is.
Lido Daily Analysis. Source: TradingView
If buying pressure increases, this may not be the case, and LDO could rise to $2.38. If this intensifies and Lido’s TVL record is realized, the altcoin could surpass $3 in the near term.
The article LDO faces decisive moment with record TVL of US$ 40 billion appeared first on BeInCrypto Brasil.
