LDO Bounces from Range Lows, Sentiment at 9-Month High

LDO bounces from range lows, sentiment at 9-month high

Lido DAO [LDO] introduced Lido v3, an upgrade that adds flexibility to Lido on Ethereum [ETH]. Lido is the largest liquid staking protocol with over $25.5 billion in total value locked (TVL) and allows users to stake their assets and receive stETH in return.

The upgrade introduces stVaults (staking Vaults), which are modular smart contracts that allow users, specifically institutional ones, to tailor staking setups. This means that parameters such as validation, fee structures, and risk-reward profiles, among others, can be configured to meet the needs of a wide variety of stakers.

As the platform’s native token and governance token for Lido DAO, LDO saw some price appreciation after the news. Hence, the question – Should investors add the LDO crypto to their portfolios now? Let’s take a look at some key metrics.

LDO bounces from range lows, sentiment at 9-month high

Source: LDO/USDT on TradingView

The Lido DAO governance token has traded within a range since December. It appeared to fall below the lows last weekend, but was quick to bounce higher from $1.5.

And yet, its technical indicators remained bearishly inclined. The Chaikin Money Flow (CMF) was below -0.05 to highlight significant capital outflows, and the Moving Average Convergence Divergence (MACD) was below the zero line – A sign of bearishness.

Source: Santiment

Crowd sentiment has picked up too, climbing to a 9-month high, as observed by Santiment’s analyst Brian.

This also came at a time when most of the altcoin market flashed bearish signals. Rising whale activity could also be a sign of accumulation of LDO tokens.

Source: Santiment

Other on-chain metrics showed scope for LDO’s growth. The mean coin age (MCA) fell towards the end of January as the price saw a correction from the range highs at $2.4. However, over the past week, the MCA has slowly begun to move higher once again.

The dormant circulation did not match the MCA’s fall in recent weeks, and the lack of a major spike in this metric suggested that medium-term holders were happy to HODL LDO. Finally, the Market Value to Realized Value (MVRV) ratio was in negative territory, showing holders were at a slight loss. This, combined with the recent retest of a local range lows, presented a Lido buying opportunity.