Lido Finance: A dip in TVL, the return of the bears and everything in between

  • Due to the depreciation of some local currencies, the TVL in the Lido went down last week.
  • Buying pressure on LDO has eased significantly, and a price drop could be on the horizon.

Lido Finance [LDO]A prominent liquid deposit protocol, which has seen a drop in Total Value Locked (TVL) over the past week as a result of declining values ​​of the native coins within its operational network, including Ethereum. [ETH]ribbed [MATIC]Solana [SOL]Polka dot [DOT]and Kusama [KSM].

Read Lido’s [LDO] Price forecast 2023-24

According to the data from the cryptocurrency price tracker CoinMarketCapThe price of ETH has fallen by 4% in the past seven days. Similarly, SOL, DOT, and KSM prices declined by 3%, 6%, and 5%, respectively.

At the time of publication, Lido’s TVL is at $8.01 billion, having fallen 3% in the past week.

Source: Defillama

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

Trouble in lido paradise?

It is no longer news that Lido’s dominance of the liquid stock market is threatened due to increased activity on the central cryptocurrency exchange Coinbase.

According to Delphi Digital, Lido’s market share, which was 85% at the start of 2022, fell to 73% after Coinbase entered the liquid stock market in June 2022.

Limiting it to the ETH stock market, the data from Dune analytics It revealed a steady decline in Lido’s share of this vertical. At the time of writing, Lido only controls 29% of the market. On May 22, it was 32%.

Source: Dune Analytics

Your LDO winnings may be in trouble

LDO price, which has gained 109% in the past month, may see a decline as daily chart analysis indicates the beginning of a bear market cycle.

A Moving Average Convergence/Divergence (MACD) assessment revealed that the MACD line and the trend line intersected in a downtrend on January 27. The indicator has since been marked with red histogram bars. In fact, the price of LDO has since fallen by 9%, per CoinMarketCap.

When the MACD line of an asset crosses the trend line in a downtrend, it often indicates a potential trend reversal or change in momentum. As a result, it is considered a bearish cross, and is often interpreted by traders as a sell signal.

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Major momentum indicators such as the Relative Strength Index (RSI) and Money Flow Index (MFI) were also on bearish trends. For example, at the time of publication, the LDO’s RSI is 52, while its MFI has fallen below the neutral line to hold at 37.24.

These showed a steady decrease in the accumulation of LDO, usually followed by a price reversal.

Source: LDO/USDT on TradingView

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