Lido (LDO) has been struggling in 2024, experiencing a significant 35% decline year-to-date. The bearish momentum has persisted in recent weeks, with LDO dropping by 3.3% in the past 24 hours and falling below the key psychological level of $1. Currently trading at $0.9919, a notable decrease from its 24-hour high of $1.03, LDO’s price action has left many investors wary. Despite this, some analysts are cautiously optimistic about a potential turnaround.
Bullish Turnaround On The Horizon?
A recent analysis by CryptoBullet on X has sparked renewed interest in LDO. The analyst suggests that LDO may be setting up for a multi-month rally, thanks to a “beautiful Leading Diagonal” pattern observed on the weekly chart. According to CryptoBullet, this pattern indicates a potential sweet spot for buying LDO, with projected targets of $8.8, $16.6, and even $36.9 if bullish momentum intensifies. While this forecast is promising, it’s crucial to delve into LDO’s fundamental metrics to gauge the likelihood of such a rally.
Active Addresses and Market Sentiment
One key metric to consider is the number of active addresses interacting with LDO’s network. Santiment’s data reveals a steady decline in active addresses since a peak of over 7,500 in April. Currently, there are 4,211 active addresses, reflecting a nearly 5% drop from the previous month’s 5,000. This decline may suggest waning retail interest in LDO, which could pressure its price further in the short term. A reduced number of active addresses often points to decreased network engagement, potentially signaling diminished confidence among retail investors.
However, if the predicted rally materializes, an increase in active addresses could follow, indicating a resurgence of investor interest.
Open Interest Insights
Examining open interest provides additional context for LDO’s market dynamics. Data from Coinglass shows a 3.95% decline in LDO’s open interest, with a current valuation of $49.95 million. Conversely, open interest volume has surged by 68.91% to $63.21 million. This divergence suggests that while the total value of active contracts has decreased, the number of contracts being traded has increased significantly.
This scenario might indicate heightened speculative activity, with traders expanding their positions in anticipation of potential price movements. The rise in open interest volume, despite the overall drop in open interest valuation, could signal that traders are positioning themselves for a possible market shift.
Also Read: Lido Targets $25B+ Institutional ETH Market With New White-Glove Staking Service
If CryptoBullet’s bullish forecast comes to fruition, the increased trading activity and potential resurgence in active addresses could provide the momentum LDO needs to reverse its current downtrend. Investors should remain vigilant and monitor both technical patterns and fundamental metrics to navigate the evolving landscape of Lido.
As LDO grapples with its current bearish phase, the anticipated turnaround could present a critical opportunity for those ready to seize it.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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