The hostile market environment is currently hampering altcoins from gaining in the short term. With the broader market down 2%, LDO is losing mounted up to 18% since last week, and this week still ends with pain for investors in the short term. This led to shaky investor confidence as fear, uncertainty and doubt plagued the market.
LDO’s underperformance overshadows the platform’s growth over the past month. Lido DAO released analytics showing several aspects that showed increases across the board.
Lido DAO experiences growth in the 2nd half of August
According to the latest data from Lido threadthe platform saw significant increases in almost every aspect of the network. Total value locked (TVL) saw the most notable increase of 4% between August 19th and August 26th. LDO staked on the Polygon chain also grew by 25% in the same time frame.
Lido Analytics: August 19 – 26, 2024
TLDR:
– TVL rose 4.72% to $26.98 billion.
– 28,160 ETH net unstaked.
– 7d sETH APR of 2.80%.
– wstETH on L2 up +0.63% to 186,676 wstETH.
– (w)stETH 7d trading volume up 18.76%.👇 photo.twitter.com/2k5tZS0TAm
— Lido (@LidoFinance) August 27, 2024
However, a look at Ethereum reveals 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 almost $71 million, marking a serious drop in staked Ether on the platform. The annual rate is also on a downward trend, as the Ethereum network saw record low gas fees following the general market momentum.
Ethereum lending is faring better, up slightly despite liquidity pools and resttaking activity shrinking by a margin. However, (w)stETH trading volume is up nearly 20% week-to-date, which includes both inflows and outflows, showing that the platform still has the throughput to be on par with its peers.
Lido’s activities on layer 2 blockchains also saw a broad increase in the wstETH bridged. The platform should be able to handle the bearish market sentiment present within the current market environment.
$0.91-$1.1 trading range to stabilize LDO in the near term
The current position of the token leaves little to no room for short-term gains for both bulls and bears. However, the narrow trading range could work out well for the bulls as the market volatility decreases, which benefits the bulls.
With this in mind, investors and traders should be optimistic about LDO’s future performance as the relative strength index (RSI) shows that the bulls are slowly catching up with the bears after a week of bearish activity.
LDO’s significant correlation with major cryptocurrencies like Bitcoin and Ethereum could prove to be a double-edged sword for the token. With BTC rebounding to the sub-$60k level and ETH struggling to retest $2.8k, LDO could face more pain in the short term as these cryptocurrencies face obstacles.
Investors and traders should be cautious with LDO while monitoring the broader market momentum for opportunities. If bullishness returns to the market, a long-term retest of $1.6 is a possibility.
Main image from Pexels, chart from TradingView