The unfavorable market environment is currently preventing altcoins from rising in the short term. With the broader market down 2%, LDO is seeing losses Horseman Rising by 18% from the previous week, this week too is ending with pain for investors in the short term. This has shaken investor confidence as fear, uncertainty and doubt plagued the market.
LDO’s poor performance outpaced the platform’s growth over the month. Lido DAO has released analysis that shows several aspects saw growth across the board.
Lido DAO witnessed a rise in the second half of August
According to the latest data from Lido ThreadThe platform saw significant growth in almost every aspect of the network. Total Value Locked (TVL) saw the most notable increase of 4% between August 19 and August 26. LDO staked on the Polygon chain also increased by 25% in the same time frame.
Lido Analytics: August 19 – 26, 2024
In short:
– TVL increased by 4.72% to $26.98 billion.
– 28,160 ETH net unstaked.
– 7d stETH at APR 2.80%.
– wstETH on L2 increased by +0.63% to 186,676 wstETH.
– (w)stETH 7d trading volume increased by 18.76%.pic.twitter.com/2k5tZS0TAm
— Lido (@LidoFinance) August 27, 2024
However, a look at Ethereum also highlights the other side of the coin. The platform saw a net outflow of 28,160 ETH, which, at the current price of ETH, is worth around $71 million, indicating a severe decrease in staked Ether on the platform. The annual percentage rate has also been on the decline as the Ethereum network saw record low gas fees following the general movement of the market.
Ethereum lending is faring better, seeing a slight increase despite a slight decrease in liquidity pools and restaking activity. However, (w)stETH trading volumes have increased by around 20% since last week, including both inflows and outflows, indicating that the platform still has throughput on par with competitors.
Lido’s activities on the Layer 2 blockchain also saw massive growth in wstETH Bridged. The platform should be able to handle the bearish market sentiment present in the current market environment.
$0.91-$1.1 trading range to stabilize LDO in the near term
The current state of the token leaves little or no scope for short-term gains for both bulls and bears. However, the narrow trading range could bode well for the bulls as the market volatility reduces, favoring the latter.
Taking this into account, investors and traders should be optimistic about the future performance of LDO as the relative strength index (RSI) shows that the bullish ones gradually outweigh the bearish ones after a week of bearish activity.
LDO’s significant correlation with major cryptocurrencies like Bitcoin and Ethereum could be a double-edged sword for the token. With BTC returning to sub-$60k levels and ETH struggling to retest $2.8k, LDO could face more pain in the short term as these cryptocurrencies face hurdles.
Investors and traders should be cautious on LDO while monitoring broader market momentum for opportunities. If the market returns to bullishness, a long-term retest of $1.6 is possible.
Featured image from Pexels, chart from TradingView
